Hanafi is one of the four schools (madhabs) of Fiqh or religious law within Sunni Islam. Founded by Imam Abu Hanifa, it is considered to be the school most open to modern ideas. Its followers are sometimes known in English as Hanafites or Hanifites (cf Malikites, Shafiites, Hambalites for the other schools of thought).
Hanafi is predominant among Sunni Muslims in Pakistan and northern Egypt (where the influence of the Ottomans was strongest). Northern Egypt is mixed Hanafi/Shafi while upper Egypt and the Sudan are Maliki, Turkey, the Levant (Syria, Lebanon and Iraq are mixed Shafi/Hanafi. The Kurds of Turkey, Syria and Iraq follow the Shafi school. Bosnia-Herzegovina, Albania the Indian subcontinent, amongst the Muslim communities of the Balkans (in Bulgaria and Romania for example) Central Asia (Uzbekistan, Turkmenistan etc) the Muslims of China the Muslims of Russia and Ukraine (Tatars and Turks). The Constitution of Afghanistan allows Afghan judges to use Hanafi jurisprudence in situations where the Constitution lacks provisions.
Hanafi is the largest of the four schools; it is followed by approximately 30% of Muslims world-wide. The other three schools of thought are Shafi, Maliki, and Hanbali.
The Hanafi school is considered to be one of the more liberal-for example, under Hanafi jurisprudence, blasphemy is not punishable by the state, despite being considered a civil crime by some other schools.
The presence of four different schools of religious law within Sunni Islam should not be viewed as a schism. On the contrary, there is little or no animosity between the schools. Instead there is a healthy cross-pollination of ideas and logical debate that serves to refine each school's understanding of Islam. It is not uncommon, or disallowed, for an individual to follow one school but take the point of view of another school for a certain issue (for example the Egyptian Sheikh Imam al-Qarafi was an Imam in both the Maliki and Shafi schools.