Theocracy

New Luciannova is formally known as "the Apostolic Commonwealth of New Luciannova." This explicitly means we identify as a nation that Jesus Christ, working through His Apostles, has blessed to exist, much like the Holy See. As a result we have always placed a high priority on sprituality and have aligned ourselves firmly with the Roman Catholic Church.
Declaring ourselves a theocracy at this point has become more of a formality than a new or novel policy. Most of our schools do teach the Catholic faith, but the mandate to be a practicing Catholic (let alone one in good standing) is not particularly enforced.
That said, some things are essential, a portion of tax dollars go to spirituality, the use of this money is overseen by the House of Bishops, who do allow some to go toward other faiths we welcome and public schools do have optional prayer each day that is directed and lead by the school itself. Those who wish to opt-out may do so without any undue burdens imposed, and can engage in their own prayer during that time or sit quietly. Further they are free to attend private or home schools that do promote their chosen faith.
Further the House of Bishops does allow religious leaders of other faiths we recognize to sit within its membership including other Christian denominations, Mormons, Unitarians, Jews, Muslims, Buddhists, Baha'i, Taoist, and many others. These are apportioned by population. They are allowed to establish their own private schools and their non-profits, schools, and centres of worship recieve many of the same privileges our Catholic and government schools do.
The only restrictions we impose on faith are when cults or potentially unwholesome faiths spring up. We don't actively stamp them out, but ensure they are not engaged in any harm. By cults we refer to ostensibly religious organizations that actively are engaged in self-destructive behavior or the abuse of members and former members.