God came to earth as Jesus, the Anointed One, fulfilling all that the law and prophets had said concerning him, inaugurating his kingdom. He lived perfectly that he might substitute himself for us, taking our punishment on the cross and triumphing over death by his resurrection. Not only did he win our justification, making us righteous, but he completely defeated the power sin had become, liberating us from its oppression. Though we had been enemies of God, he gave us life as a consequence of his gracious love, not based on any meritorious works that we might attempt in order to garner God’s favor. Through Christ, we have been redeemed and reconciled to God, adopted into his family. Given the righteousness of Christ, we become members of the kingdom of God, free to do the work of the kingdom in restoring all of creation unto God.
In the Old Testament, we sense that things are not as they should be. God created a good world; everything was in order as it should have been, ruled by the Sovereign Lord. But our first parents (Adam and Eve) rebelled against God and brought sin and death and corruption into the world by their disobedience. They could no longer stay in communion with God, and their relationship with one another would suffer as well. This is the state all humans find themselves in: They are spiritually dead, unable to do anything to restore their relationship with God, and injustice, fighting, and suffering still marks this world. Humans are characterized by sin.
God would be completely just in punishing all of humanity with eternal damnation because of their rebellion. But God is gracious and made a covenant with Abraham that through his offspring, people would be brought back to a right relationship with him and one another. Their sin would be forgiven, and they would be made righteous. Justice demands, however, that punishment still be granted. This gave way to the sacrificial system, in which priests acted as mediators between the people and God, killing an unblemished animal as a substitute for then people to atone for their sins.