An interesting writer on the subject is Gilbert Murray, specifically his Five Stages of Greek Religion. One of the themes in that and other works is the Ancients didn’t really distinguish between religion and politics and that monotheism equated with monarchy, as in one god, one ruler. While pan and poly theism equated with more democratic and republican forms. As in many gods, many voices.
As Western culture settled into monotheistic religion, the divine right of kings became the default political model. The separation of church and state arose when democratic political systems returned.
Another interesting take on the relationship between kings, oligarchs and the larger population is in a recent series of interviews, with Michael Hudson, at Naked Capitalism;
On a conceptual level, I think part of the problem is the modern tendency to quantize and digitize everything into components, losing a sense of the larger connectivity and flow, but that is another level of the situation.
