The ecclesiology of Vatican II centers on "communio", the vital union of each member of the Church with Christ, and of all with one other in Christ. As a more concrete way of expressing this "communio", the Council dwells on the expression "People of God".
"People of God" recalls the whole history of salvation: God's care for those he has created. The result of Original Sin was not only that each one was estranged from him individually, but that they lost their natural solidarity among themselves and became fundamentally dispersed. God wished to save them not just singly or one by one, but to gather them together into a chosen people, and lead them - united under leaders designated and given by him - to the Promised Land (CCC 781; LG 9). The Jews in the Old Testament are a figure of the Church as the new Chosen People of God, open to all mankind.
"The gathering together of the People of God began at the moment when sin destroyed the communion of men with God, and that of men among themselves. The gathering together of the Church is, as it were, God's reaction to the chaos provoked by sin" (CCC 761).
'People of God' emphasizes the pilgrim vocation of this new chosen people, their eschatological destiny as they make their way through human history travelling toward the Promised Land. It suggest the particular joy that should be theirs at being summoned and gathered together by God, and belonging to God, with special claims on his love and guidance and mercy. It stresses the calling addressed to each Christian to share in a common endeavor, the radical equality of christian dignity, and the rights and duties as well as the distinctive graces of each one.
To properly understand this biblical expression, it is important to realize that the emphasis is not just on "people", but rather on "God". What matters is God's choice: that the People are God's. It is He who calls them together, leads and saves them. One becomes a member of this people not by physical birth, but by being "born again", through God's grace given in Baptism (cf CCC 782).
It would be a radical misunderstanding of the biblical expression and of Vatican II's intention in using it, to suggest that the Council thereby wished to introduce a more "democratic" notion of the Church; a Church where "power" would ultimately and properly derive from the people. The Church, hierarchical by constitution (LG 18-29), is a people gathered under a King; it is a monarchy not a democracy. The authority (rather than "power") or the jurisdiction exercised within the people comes "from above" (cf. Jn 19:11); in its fundamental aspects it can only come from a divine commission.
It is hard to live a faithful christian life without being conscious of the privilege and dignity of belonging to God's People: "The state of this people is that of the dignity and freedom of the children of God" (LG 9). This consciousness helps one to exercise one's freedom so as to remain within that People, and remain there as a living member. Our human weakness leads us to commit sins; if these are serious, the consequence is that though still within the community of God's People, we are no longer living with its life. Nevertheless, we can always return to that life by Penance (cf. the Prodigal Son). Heresy however, and dissent too if truly radical, rupture our living communion with Christ and his members, and involve self-exclusion from the People of God (placing a person in a situation of "ex-communion").
The growing loneliness that many people are experiencing in the world today, and even in the Church, is ultimately due to a sense of not belonging to a people, of not feeling the strength of common values and a common inheritance, of not having learned to rejoice in the grace and truth of Christ. "The sons and daughters of the Church, the children of this new people, rejoice in the King, in Christ" (Heschius: cf. Liturgy of the Hours, Lauds. 1st Sunday of Ordinary Time).
The People of God is 'God's' only in the measure of its participation in the life and the triple mission of the Son of God. It is meant to be a "people on the move"; evangelizing the world of which it forms part. It is not a "closed" people, but is open to all those it meets, seeking to draw them to join in the pilgrimage to the Promised Land. Its mission is also to be salt of the earth and light of the world (CCC 782). Only a Church which is truly a united people, one in faith, charity and ideals, one in respect for rights and in the fulfillment of obligations, one in love for lawful authority coming from God, can be "that messianic people which is a most sure seed of unity, hope and salvation for the whole human race" (LG 9).