Two kingdoms theology is a Reformed framework that distinguishes between God's rule over the spiritual realm (the kingdom of grace/the Church) and his rule over the civil realm (the kingdoms of this world). While the two are distinct in purpose and authority, Reformed theologians emphasize that Christ remains the sovereign Lord over both.
Reformed theology maintains a vital distinction between the spiritual kingdom of Christ and the institutions of civil government. As John Calvin argues in the Institutes of the Christian Religion, the spiritual kingdom pertains to the soul and eternal life, whereas civil government regulates external life and order among men. It is a 'Jewish vanity' to confuse these spheres or suggest that because we are free in Christ, we are exempt from civil laws. Instead, we are called to honor those in authority, as Scripture commands: 'Honour all men. Love the brotherhood. Fear God. Honour the king.' (1 Peter 2:17).
The spiritual kingdom is the domain where Christ rules by his Word and Spirit, fostering faith, holiness, and eternal life through the Church. Conversely, civil government is ordained by God to maintain public peace, protect the innocent, and restrain the wicked. As taught in the Institutes of the Christian Religion, civil authority is not opposed to Christian liberty but is a necessary aid during our pilgrimage on earth. Christians are subject to the magistrate because all authority originates from God: 'Let every soul be in subjection to the higher powers: for there is no power but of God; and the powers that be are ordained of God.' (Romans 13:1).
While we are to be submissive to civil authorities as a matter of conscience, this obedience is never absolute. When the requirements of civil government directly conflict with the revealed will of God, the believer must prioritize their allegiance to Christ. The Institutes of the Christian Religion makes clear that if rulers command anything against God, we must adhere to the apostolic principle: 'But Peter and the apostles answered and said, We must obey God rather than men.' (Acts 5:29). Thus, we live as citizens of two worlds—subject to the temporal authorities God has placed over us, while our ultimate life is hidden with Christ in God.