Summary: Anticipating Canada Day [and Independence Day], I invite the people of God to think what it means to live as "free people."
“Live as people who are free, not using your freedom as a cover-up for evil, but living as servants of God.” 
Being free and living as one who is free are two entirely different concepts. People who have been incarcerated for extended periods may have difficulty adjusting to life outside of prison walls. Through long confinement, these individuals have been conditioned to avoid making decisions on their own. Throughout the period of imprisonment, they were told when to wake up, when to go to bed, when to eat—essentially, they had no freedom to make decisions for themselves. In a more pragmatic sense, they have not been required to accept responsibility for any decisions related to the minutiae of life. Thus habituated, they discover that freedom is an intimidating concept. It is frightening to be responsible for one’s own decisions. However, freedom always carries the burden of responsibility.
The command to live as people who are free comes in what many today find to be a puzzling context—a call to submission. The only free people within contemporary culture are those who have learned the secret of subjection to institutions ordained for human good—government, labour and family. So that no one need be confused as to his concern, Peter identifies the principle institution in view as the government. Specifically, he names the emperor and governors. It does not seem wrong to take his point as meaning that we who are Christians are to work to foster an attitude of submission toward government—federal, provincial and local.
In the verses that follow, Peter will continue with his exposition naming specific institutions to which Christians are to subject themselves by naming (in the modern context) relationships to employers [1 PETER 2:18-25], marriage [1 PETER 3:1-7] and even the cultural milieu in which we live [1 PETER 3:8-12]. The general principle is that we are to first arrange ourselves under the reign of God, then in so far as there is no conflict to human institutions, we are to subject ourselves willingly to these other institutions.
I acknowledge that such voluntary subjection can be messy. Having experienced some conflicts in life, I can imagine the necessity of judgement calls requiring a conscientious Christian to act obediently to a human institution, even when other equally conscientious Christians disagree with the submission. At other times, a believer intent on honouring the Lord will find himself or herself in conflict with various human institutions, perhaps gaining the disapproval of fellow believers.
Whatever the situation, if we will honour the Living God, our response must reflect humility, even while soliciting the support of other believers. Each of us as followers of the Son of God must show consideration for our fellow saints. We will do well to recall the apostolic admonition, “I therefore, a prisoner for the Lord, urge you to walk in a manner worthy of the calling to which you have been called, with all humility and gentleness, with patience, bearing with one another in love, eager to maintain the unity of the Spirit in the bond of peace.” [EPHESIANS 4:1-3]. Above all else, we must ensure that we endeavour to know the will of God and boldly do that which pleases Him and honours Him.
*LIVE FREE* — The Christian can live as free because the Christian is free. Before we move into the text proper, think of several rich verses that speak of the freedom we have in Christ the Lord. “For freedom Christ has set us free; stand firm therefore, and do not submit again to a yoke of slavery” [GALATIANS 5:1]. “You were called to freedom, brothers. Only do not use your freedom as an opportunity for the flesh, but through love serve one another” [GALATIANS 5:13].
Jesus pointed to a rich promise of freedom for those who followed Him. “If you abide in my word, you are truly my disciples, and you will know the truth, and the truth will set you free” [JOHN 8:31, 32]. Soon after this, the Son of God spoke again, promising, “If the Son sets you free, you will be free indeed” [JOHN 8:36]. This promise is iterated by Paul, when he wrote, “The Lord is the Spirit, and where the Spirit of the Lord is, there is freedom” [2 CORINTHIANS 3:17].
In light of where we will be going shortly, consider a couple of other verses of Scripture. “Thanks be to God, that you who were once slaves of sin have become obedient from the heart to the standard of teaching to which you were committed, and, having been set free from sin, have become slaves of righteousness” [ROMANS 6:17, 18]. Paul followed this statement with another emphasising the identical point. “Now that you have been set free from sin and have become slaves of God, the fruit you get leads to sanctification and its end, eternal life” [ROMANS 6:22]. Mankind is enslaved; each individual is either a slave to sin or a slave to Christ. The former speaks of thralldom that leads to death; the latter points to life and in what from the outside appears to be incongruous, freedom.