Ancient Roman political theory (on which, however distorted, the western system is based), divided human society into three discrete "sub" societies. These were Domestic Society (the Family), Civil Society (the State), and Religious Society (the Temple, or as we say today, the Church).
The Romans being a very orderly people, none of the societies had any power in the others. This sometimes got a little complicated. When, for example, the State required some duty that came under the purview of Religious Society — such as certain types of diplomatic missions — the officials had to have standing in both Religious and Civil Society, e.g., the ambassador had to be a priest as well. This is why Caesar was named Pontifex Maximus — High Priest — so that he had the authority to call upon the various temples when necessary to carry out their duties to the State.
There was separation of Church, State and Family in the sense that the administration was completely separate, not that there was some kind of "wall of separation" between Church, State and Family, with each one ignoring or being actively hostile to the other two. The laws of one society did not apply to the others, especially the power to tax; people — that is, citizens — were taxed, not families or temples. Non-citizens paid taxes to their own governments (which then paid tribute, not taxes, to Rome) and obeyed their own laws.
This last resulted in some extremely complicated legal cases, especially in the late Empire, when even different groups of Roman imperial citizens came under their own national laws, and a judge had to determine which body of law applied when, e.g., a Gothic-Roman and a Frankish-Roman might be involved in a dispute with an Italian-Roman over a Burgundian-Roman matter — or even if it came under his purview at all, which it might not as a domestic or religious matter.
For example, recall the apparent contradiction in the New Testament in which a woman caught in adultery was about to be stoned to death, and St. Stephen was killed — and yet the mob at Jesus's trial claimed that they had no law to put a man to death! This is easily understood once we realize that the woman caught in adultery had committed a crime against Domestic Society, while St. Stephen's alleged offense was against Religious Society, neither of which was of concern to the Romans, even if the woman or St. Stephen had been Roman citizens.
Jesus's alleged crime, however, was to set Himself up as a civil authority in opposition to Caesar. This was a very serious civil offense, and one which concerned the Romans a great deal . . . and the Jews had no law to punish offenses against the Roman civil authorities. Even capital cases under Jewish civil law, given Herod's rather tenuous position, may have required ratification by the Romans.
There is a good reason for bringing up what some might consider a rather esoteric subject. The change in the understanding of the natural law from being based on God's Nature, self-realized in His Intellect, to something someone with enough coercive power believes to be God's expressed Will, occasioned a shift away from the traditional political philosophy on which recognition of these three discrete societies is based.
As Sir Robert Filmer's Patriarcha explained the "proper" ordering of human society, both religious society and domestic society became subsumed into civil society under a divine right monarch who ruled both Church and State as "father" — patriarch — of the national family. All distinctions between the different societies were either ignored or abolished. Both Church and Family were construed as branches of the government, something unheard-of in either classical or medieval jurisprudence or political theory. As Heinrich Rommen explained,
"[T]he individualistic principle of the Reformation contradicted such an all-embracing absolutism of the identity of monarchy and the national Church, since in its extreme form this principle had to lead to the dissolution of the Church as a divinely instituted community with her sacramental law, her hierarchical order, and her ecclesiastical government.
"Now that the monarchy and the established Church (state Church) were united in the absolute king of divine right, i.e., of unrestricted sovereignty, it was again from the individualistic principle that the problem of sovereignty had to be attacked. On the other hand, the personalism of the Renaissance with its enthusiasm for the personal freedom of worldly wisdom, of an aristocratic republicanism, brought forth this same problem of the origins and restrictions of sovereignty. Thus the centuries are filled with discussions about divine rights, that is, absolute sovereignty of the king and chief bishop versus popular sovereignty and freedom of religion. The question of freedom of the individual from compulsory membership in the established Church arose.
"From this original freedom of religion, other freedoms were later derived, such as freedom of the person, of speech, of association, though these 'civil liberties' do not rest exclusively on this individualistic concept of freedom of religion. It was not Man versus the State, but the individual conscience against the summepiscopus and absolute monarch, and civil liberties and constitutional rights of participation in sovereign legislation against unrestricted princely government, and popular sovereignty versus conformity and subjection in spiritual and secular matters to an unrestricted monarchic sovereignty which was ultimately justifiable only if divinely instituted. Thus the civil liberties and the democratic institutions in the eyes of the writers of political Romanticism seemed to be founded upon the Protestant principle of religious individualism. This conclusion was not cogent, since these rights and institutions can be considered also from the standpoint of natural law. Yet the romantic political philosophy was induced to see in the opposite political institutions (e.g., in monarchy) a consequence of Catholic theology. Thus they fought one pretended political theology by constructing another one just as precarious as the first." (Rommen, The State in Catholic Thought, op. cit., 101-102.)
The results have been catastrophic. Even in the United States, explicitly founded on the traditional concept of popular sovereignty — as the "We, the People" in the Preamble to the Constitution acknowledges — the State has redefined marriage in a number of cases, and has undertaken to redefine traditional religious practices as not religious in character. Marriage, of course, is a domestic institution, and thus not covered by the Constitution at all, a document that applies to civil society. Then, defining or controlling religious practices (as opposed to regulating for the common good) is a clear infringement of the right to religious freedom guaranteed in the Constitution.
This has only been possible because the economic system has operated to strip most people of the economic and thus political power necessary to be able to resist such overweening intrusion by the State. "Power," as Daniel Webster reminded us in the debates during the Massachusetts Constitutional Convention of 1820, "naturally and necessarily follows property." Unfortunately, Keynesian economics is based on the assumption that most people are naturally and necessarily stripped of property — and thus power, helpless before the might of the State. Not surprisingly, we can trace Keynes's economic theories back to the totalitarian political philosophy of Thomas Hobbes.