Both Jefferson and Madison, in the previous examples, were speaking about the establishment of a religion by law.

"It was the belief of all sects at one time that the establishment of Religion by law, was right & necessary; that the true religion ought to be established in exclusion of every other; and that the only question to be decided was which was the true religion. The example of Holland proved that a toleration of sects, dissenting from the established sect, was safe & even useful. The example of the Colonies, now States, which rejected religious establishments altogether, proved that all Sects might be safely & advantageously put on a footing of equal & entire freedom.... We are teaching the world the great truth that Govts do better without Kings & Nobles than with them. The merit will be doubled by the other lesson that Religion flourishes in greater purity, without than with the aid of Gov. [James Madison, Letter to Edward Livingston, July 10, 1822, The Writings of James Madison, Gaillard Hunt]


An example of what they were talking about being harmful to the states' rights and individual liberties is what we are seeing happen with the current government promoting Islam and supporting Muslims' and their religion. See what a mess happens when the govenment gets involved in religion and sets out to promote one religion over another.