Final answer:
Muhammad considered Jews and Christians as "people of the book" because they are followers of monotheistic religions with revealed scriptures, similar to the Qur'an, but believed to be altered over time.
Step-by-step explanation:
Muhammad referred to Jews and Christians as "people of the book" because he recognized them as monotheists who received revealed scriptures from God. According to Islamic belief, these scriptures have much in common with the Qur'an, although Muslims hold that their texts were corrupted over time. In contrast to these earlier revelations, the Qur'an is viewed by Muslims as the unaltered and final word of God. The recognition of Jews and Christians as "people of the book" was significant in Islamic law and conveyed a level of respect and protection within Muslim-ruled territories, provided that the adherents of these faiths paid taxes and accepted Muslim rule.