Christian conduct outside of the church is to be sensitive in two directions, to government authorities (v. 1) and to all people (v. 2).
Paul's injunction to recognize the state is firmly embedded in the New Testament church's ethical code. Here we find a command common to other New Testament "household codes" at the head of a list of virtues (see 1 Tim 4:12; 6:11; 2 Tim 2:22; 3:10). It is likely that Paul and other New Testament writers drew on and adapted teaching from a common source to which the "household code" belonged (see on 1 Tim 2). This aspect of the teaching encouraged the church to respect the government; a form of the verb "to be subject to" is typical of this kind of teaching (Rom 13:1, 5; 1 Pet 2:13). Essentially, the instruction calls for Christians to participate in this level of the social structure (as far as possible) according to society's rules.
Participation as such takes two courses. "Obedience" is left unexplained, but presumably it corresponds to Romans 13:6 where a specific example of doing what is obligatory (paying taxes; in 1 Tim 2:2, obedience takes the form of praying for--and thereby expressing loyalty to--government leaders) underlines the need to do what the "system" requires. Subjection to the state--that is, adherence to and recognition of this institution--means obeying the rules.
Yet subjection also necessitates the more active expression of the Christian life which is (according to the early church's code) traditionally termed "doing good" (Rom 13:3; 1 Pet 2:15). This was the attitude of the respectable, loyal citizen. As with the other two passages cited and throughout the Pastorals, "doing good" is Christian existence portrayed in tangible ways in the life of the believer or the community (collectively) as the observable manifestation of the Holy Spirit. Paul has stressed in other contexts that this "expression of the Spirit" will include socially responsible behavior (Tit 2; 1 Tim 2:8-15; 5:1-2, 9-14; 6:1-2).
At verse 2 the church's responsibility toward all people comes into view. The tradition seems to have influenced Paul here to connect this responsibility and the responsibility to the state (compare 1 Pet 2:13, 17). Essentially, the instructions advise the Cretan Christians to make as few waves as possible by living in a way that fosters good relations. In the area of speech, Christians are not to be known as those who slander others. Rather, in speech and conduct (that is, in the totality of life; see discussion at 1 Tim 4:12) they are to be known for peaceableness, gentleness (NIV considerate) and meekness (humility) toward all people.
Misunderstanding these qualities leads to what has been called "doormat Christianity." But in reality they have nothing to do with passivity. Peaceableness is a conscious mode of response that allows one to resist taking a violent course in difficult situations, often sacrificially, in order to save relationships. Gentleness (or consideration) is an attitude that quiets personal concerns to make room for the concerns of others. And meekness (humility) is that balanced perception of oneself that makes it possible to regard others as more important (compare Phil 2:3-4). In fact, the last two qualities describe Christlikeness, the basic disposition of Christ toward others (2 Cor 10:1; compare 1 Tim 3:3; 2 Tim 2:25). Paul's language portrays Christian living in relation to all people as reasoned forbearance in every aspect of life, the putting of the concerns of others ahead of one's own.