Luther lucidly brought to light the biblical doctrine of the two kingdoms: God has two kingdoms, the spiritual and the earthly kingdom.

The affairs of the spiritual kingdom are conducted by Christians with the help of God's Word in Christian churches.

The earthly kingdom is the same as society with its civil government and laws.

Luther stressed the importance of keeping these two kingdoms separate from each other. When he counselled the princes in matters pertaining to the permanent establishment of Christian congregations, he did this because these princes were good church members (praecipuae membrae ecclesiae), not because they were civil rulers.

The separation of Church and State is based on Christ's words: "Render to Caesar the things that are Caesar's and to God the things that are God's" (Matt. 22:21).

Both from the standpoint of the State as well as of the Church it is right and expedient that they be kept separate. Most of the people of countries with a State church system are, for historic reasons, accustomed to thinking of these matters sentimentally. However, one should bear in mind what the Bible teaches and at the same time remember that when the State connected the Church to itself, it acted contrary to the principles of the Reformation. The proper implementation of the separation of the State and Church in these countries cannot harm the true Church of Christ, but will in time mean victory for the Gospel. The present bond between Church and State prevents many from seeing the real spiritual condition currently prevailing in Europe. The result is that there is an appalling lack of knowledge as to how to make correct and effective decisions for the salvation of souls and for their edification in Christian faith. Sometimes the whole problem is not recognized.

In the countries like United States where the separation of the State and the Church has taken place it has been a blessing for the confessional Lutheran churches, which are in minority.