A combative Bilawal also took on the judiciary for lack of action to punish those arrested for the murder of his mother.
"With Benazir Bhutto as my witness, I vow that the Pakistan Peoples Party will not allow any dictator to snatch the people's rights and that the PPP will not be afraid of any terrorist," Bilawal told a gathering of tens of thousands that gathered at Garhi Khuda Bux in Sindh province to mark Bhutto's 5th death anniversary.
The ruling PPP chose the massive rally held outside the Bhutto family mausoleum to formally launch Bilawal's career.
Though he will not be eligible to contest polls till he turns 25 next September, Bilawal, chairman of the party, is expected to lead the PPP's campaign for next year's general election.
In an emotional speech in Urdu replete with references to sacrifices made by PPP founder Zulfiqar Ali Bhutto and his daughter Benazir, Bilawal said: "We have chosen the difficult path of democracy that has tears, thorns and stones. This is the same path that (Benazir Bhutto) taught us to walk on".
The PPP, he said, was the "biggest wall against terrorism" while other political forces feared to "even take the name of terrorists".
Bilawal paid tribute to others killed by the Taliban and militant groups, including Punjab Governor Salmaan Taseer, federal minister Shahbaz Bhatti and Awami National Party leader Bashir Ahmad Bilour, and questioned why only those wanting peace and championing democracy were being targeted.
While Bilawal did not name the PPP's opponents in his speech, he singled out the judiciary and Supreme Court Chief Justice Iftikhar Chaudhry for criticism.
Bilawal questioned why the Chief Justice had not acted on an application from his father, President Asif Ali Zardari, seeking a review of the death sentence given to Zulfiqar Ali Bhutto.
He also questioned the lack of action by the judiciary to punish those arrested for the murder of Benazir Bhutto, who was assassinated by a suicide bomber after an election rally in Rawalpindi on December 27, 2007.
Bilawal contended that the judiciary was focussing on irrelevant issues like fixing the prices of "pakoras, samosas and sugar" and criticism of judges by the media.
"Is your job giving justice or governing? Why are you not hearing the voice of the PPP workers?" he said.
He pledged to thwart efforts by elements who were using dictators, intelligence agencies, state institutions and "other players" to end democracy and stop the PPP.
"They are bent on destroying democracy but we will not allow it," he added.
Zardari and Bilawal, who were clad in black, held hands and waved to the large gathering after they arrived at the venue of the rally.
Zardari, who spoke after Bilawal, gave a clear indication that his son would now play a larger role in the PPP's affairs.
PPP insiders said Bilawal had worked hard to brush up his Urdu for Thursday's speech.
"Bilawal's education is over and now it's time for his training. He will live among the workers and learn about the people and Pakistan," Zardari said amidst cheers by PPP supporters.
The PPP's decision to give Bilawal a greater role in the upcoming election campaign has been influenced by several recent orders from the judiciary, including one from the Supreme Court that said the President should be non-partisan and have no political affiliations.
Zardari said all preparations had been made for holding clean and transparent polls and that the PPP will "not be scared off by anyone and will always fight" any efforts to delay the election.
An interim government and a caretaker premier will be chosen after consulting all political parties to oversee the polls, he said.
"Anyone thinking of bringing the Egyptian model to Pakistan has the wrong impression. We will not allow any Egyptian model," he said.
Pakistan's parliament will complete its five-year term in March and the country expected to go to the polls in April or May.
Several senior PPP leaders, including Prime Minister Raja Pervez Ashraf, former premier Yousuf Raza Gilani and Aitzaz Ahsan, addressed the gathering and pledged their allegiance to the party and Bilawal.