What does karamah mean, does it have a place in Islam? The short answer is…
Karamah, which literally means “value” and “worth”, technically refers to an extraordinary happening that occurs in a believer who does good deeds, irregardless of the claim of prophethood. If the person to whom this happening occurs is not a person who has good deeds, that extraordinary happening is called as “istidraj”.
The statement “Karamah appears but not is manifested” means that it occurs when Allah desires and cannot be exhibited whenever one wants. It is not necessary for a believer to show karamah in order to be a pious servant. In the aqaid (Islamic creed) books, there is a judgment as “Karamah is true and a reality.’’ This means that karamahs may happen to a pious servant. Therefore, karamah should be seen as a gift of Allah to the god-fearing people.
Source: Presidency Of Religious Affairs The Turkey, High Board of Religious Affairs FATWAS