Chapter two best starts in verse four. (The first three verses are connected to chapter one.) Here Peter laid out the reason to live properly in this world and some practical examples of what that should look like. His reason is very simple: our relation to Jesus. Peter portrayed Jesus as a stone lying on the ground. For unbelievers, he is “a stumbling-stone and a rock to trip over” (1 Peter 2:8). For believers, however, he is a foundation on which we “as living stones, are built up as a spiritual house” (1 Peter 2:5). Because we are “now…God’s people” who “have received mercy” (1 Peter 2:10), we should “maintain good conduct among non-Christians, so that…they may see [our] good deeds and glorify God when he appears” (1 Peter 2:12).
Practically, this means that Christians, even though dispersed throughout this godless world, are to obey governing authorities (1 Peter 2:13-17), using any freedoms we have to serve God and each other. In those situations when we do not have freedom, we must live under subjection in the fear of God, obeying our masters, even if they persecute us for our faith (1 Peter 2:18-20). Peter actually considered that to be an honor, because it would be an imitation of Jesus himself, who suffered though he lived perfectly (1 Peter 2:21-25).