The reformers recognized that God reigned over the universe, but that we could distinguish how God reigned through his administrations of church and government.
We render to Caesar what is Caesar’s and to God what is God’s. Since grace does not destroy nature, we belong to heaven even while having obligations to administrations on earth. So we pay taxes to whom taxes are due (Rom 13:6). And we honour God with our conscience, worship, and so on.
This kind of thing represents what the reformers meant by two-kingdom theology. It was not two discrete kingdoms but two distinguishable administrations of God’s one reign.
For whatever reason critiques of two-kingdom thinking pop-up in ways that do not seem to grasp the basic idea of the theological position. First, some say two-kingdoms divide up the world. But that is not true at all. God reigns over all creation but works through families, nations, the church, and so on.
Second, some (understandably) think the name implies discrete rules (of God and of man) and no place for the Bible in society. No, two-kingdoms means two administrations of God’s one rule. In fact, the name is something of a misnomer since Martin Luther, for example, spoke more often of two-governments than two-kingdoms in this regard.
Third, some imply that two-kingdom theology was a temporary reformed position that later thinkers grew out of. Not really. Two-kingdom thinking appears deep in the political thought of Augustine and in Scripture. It’s one traditional and wide-spread understanding of the two cities—of God and man. Further, one only has to read Franciscus Junius’s The Mosaic Polity to see how the Bible has ongoing authority within the political realm.
At the end of the day, two-kingdom theology in the reformed and patristic idiom vouchsafes God’s reign over creation, whether of pagan or Christian kingdoms. It does not preclude the Bible from having a say in government. It simply realizes that God institutes all authorities (Rom 13:1).
Certainly, the view implies that common grace, or civic virtue, or whatever language you want to use exists to the point that non-believers can build roads, tax income, and much more besides with success. Does anyone doubt that? I am not saying perfect administration, mind you, but at least a relatively effective one.
Anyway, here are some scrawlings on Sunday morning on two-kingdom theology to clarify what it is since it partly amounts to accepting the basic biblical premise that God reigns over all, even pagan nations.