Per Nicholas Popper's work on Walter Raleigh and the transformation of historical culture, he highlights how for a new elite in the court of Elizabeth I and James I, like other European countries, began to develop a particular a new historical culture. No longer was history merely an exercise of rhetorical and moral training. Instead, history was a discipline that searched the fragments of the past for information for the future. In this way, the historian was someone who accrued expertise from the Past. This new scholarly elite would inform princes of what pitfalls lay ahead. Popper would refer to this as the Historian becoming a prophet of the sovereign and a minister of the State.
In this telling, minister does not refer to something political as it does theo-political. This coincides with the general turn to the burgeoning state in the 16th, 17th, and 18th centuries. This feature coincided with the Reformation among Northern European (hence Protestant) peoples. This is the deepest and darkest abiding legacy of the Reformation and, I believe, its heart and soul.
As some scholars point out, Luther in a lot of ways was not much of a theological radical. Augustine and Bernard of Clairvaux were just as insistence on the power of grace. Erasmus, and others before him, were just as, if not more so, vicious in attacking the moral turpitude of the Church. Contrary to myth, Luther's 95 theses was not the dawn of a new era, but a regular request for debate on a matter of ecclesiatical and theological importance. However, if we're to pick a revolutionary moment, it was the kidnapping from Worms and the sequestering of Luther in Wartburg Castle by Frederick the Wise, the Duke of Saxony. From there, Luther worked on translating the New Testament into German and began a more radical phase of his writing career.
Why was this important? Because Luther gained patronage. This was the reversal of the Investiture Controversy, where the Holy Roman Emperor and the Pope battled over the rights of appointing Bishops. The Emperor lost his right over the Church in his lands, but this led to his losing political authority over Church lands. The Pope became a kind of Temporal lord that princes had to appease through the Tithe, a functional tax over all Christian citizenry. Luther's kidnapping and patronage turned the tides as German princes now broke with Rome and joined new state-church apparatuses that they had control over.
Of course, this was not quite Luther's vision. Nor was it Calvin who suffered much frustration at the hands of Geneva's political elite. Zwingli is perhaps the exception, as this was his vision. In fact, we might say that Luther and Calvin, despite their post-facto popularity, were but pawns in a larger political scheme. Zwingli was, in fact, at one with this new arrangement, being simultaneously a pastor and a patriot. He sought to lead Zurich in bringing all the Swiss cantons together in resisting Rome and the Holy Roman Emperor and becoming an autonomous federation. He died on the field of battle.
The real legacy of the Reformation is the assumption of priestly authority by the State. While Rome was power hungry and greedy, signaled by the corrupt Medici banker-family assuming the papacy in the person of Leo X, the Reformers only caused a reversal. Now princes had authority to do with the Church as saw fit. It's more complicated than that, but it highlights a certain direction.
Of course, Rome was not exempt either. Long before the Reformation, the houses of France saw Papal oversight as annoyance and coerced the bishop of Rome to move to Avignon. This is referred to as the Babylonian Captivity of the Church, where French royal politics guided the hand of Church policy. On the eve of the Reformation, Italian city-states enforced their desires through the Church and, in the collapse of German solidarity, the Roman Church fell squarely into the hands of the ascendant Spanish monarch. Eventually French princes would join in jockeying for power, with the rogue Cardinal Richelieu trying to play Catholics and Protestants against one another for the glory of the House of Bourbon.
It's not so hard to see, when stripped of Christian garb, how the more obscene deifications later on occurred. The machinery was all there, whether in the age of Revolutions (France & America), or the Romantic theo-logical conjurations of 1848, or throughout the 20th century in Fascist, and psuedo-Communist, States. The representative of the State, whether prince, president, or party, wields near religious authority over the direction and purpose of the Church.
Sadly, it was groups who were disenfranchised and broken by the threat of power that realized what had gone horribly wrong. The Reformation merely inaugurated the wide-spread of the Priesthood of all States, one that we (the Church) still suffer. May God bring life to His Church and save us from the horror of Babylon.