Peter speaks of the saints as a "royal priesthood" to denote their standing "in Christ" (1 Pet. 5:14). Since Christ is King, it follows that those who are in Christ would be royal:
1 Tim. 6:14-16: ... "till the manifestation of our Lord Jesus Christ, which in His own times He shall shew -- the blessed and only potentate, the King of the kings and Lord of the lords, who only is having immortality "... [Young]
Since the saints have received "sanctification of the Spirit" (1 Pet. 1:2), they are "holy"; that is, set apart for a special purpose. Thus, Peter refers to the saints as members of a "holy priesthood".
1 Pet. 2:5: ..."you also, as living stones, are being built up a spiritual house, a holy priesthood, to offer up spiritual sacrifices acceptable to God through Jesus Christ."
Peter states that the saints, as members of a holy priesthood, offer spiritual sacrifices which are acceptable to God. Just what are spiritual sacrifices? Other passages of scripture shed light on this topic:
Heb. 13:16: "But do not forget to do good and to share, for with such sacrifices God is well pleased."
Phil. 4:18: "Indeed I have all and abound. I am full, having received from Epaphroditus the things which were sent from you, a sweet smelling aroma, an acceptable sacrifice, well pleasing to God."
Rom. 12:1: "I beseech you therefore, brethren, by the mercies of God, that you present your bodies a living sacrifice, holy, acceptable to God, which is your reasonable service." [Greek: latreia]
Thus, spiritual sacrifices refer to doing good, sharing, and the giving of a gift to one in need. Spiritual sacrifice is said to be holy, acceptable and well pleasing to God.
In his letter to the Romans, Paul directs the saints to present their bodies to God as a living sacrifice, which, he says, is their "reasonable service" [intelligent service; Young]. This "reasonable service" is an analogy of the divine service of the priests of Israel:
Rom. 9:4: ..."who are Israelites, to whom pertain the adoption, the glory, the covenants, the giving of the law, the service [Greek: latreia] of God, and the promises"...
[Regarding priestly service (Greek: latreia), see also Heb. 9:1 and Heb. 9:6.]
Paul says he acts as a priest, offering the Gentile saints to God, as a spiritual sacrifice:
Rom. 15:15-16: ... "and the more boldly I did write to you, brethren, in part, as putting you in mind, because of the grace that is given to me by God, for my being a servant of Jesus Christ to the nations, acting as priest in the good news of God, that the offering up of the nations may become acceptable, sanctified by the Holy Spirit."
Rom. 15:15-16: "But I write to you the more boldly -- partly as reminding you of what you already know -- because of the authority graciously entrusted to me by God, that I should be a minister of Christ Jesus among the Gentiles, doing priestly duties in connexion with God's Good News so that the sacrifice -- namely the Gentiles -- may be acceptable to Him" ...
The Levitical Priesthood
The book of Leviticus states that the burnt offering, the grain offering, and the peace offering, are offered by the priests. These offerings are spoken of as "a sweet aroma to the LORD":
Lev. 1:3,9: "If his offering is a burnt sacrifice ... And the priest shall burn all on the altar as a burnt sacrifice, an offering made by fire, a sweet aroma to the LORD."
Lev. 2:1-2: "When anyone offers a grain offering to the LORD, his offering shall be of fine flour. And he shall pour oil on it, and put frankincense on it. ... And the priest shall burn it as a memorial on the altar, an offering made by fire, a sweet aroma to the LORD."
Lev. 3:1,5: "When his offering is a sacrifice of peace offering ... and Aaron's sons shall burn it on the altar upon the burnt sacrifice, which is on the wood that is on the fire, as an offering made by fire, a sweet aroma to the LORD."
The Saints as a Sacrifice
Paul uses a different metaphor with regard to the sweet aroma of sacrifice. He speaks of the saints as a sweet fragrance:
2 Cor 2:14-15: "Now thanks be to God who always leads us in triumph in Christ, and through us diffuses the fragrance of His knowledge in every place. For we are to God the fragrance [sweet fragrance; Young] of Christ among those who are being saved and among those who are perishing."
What an honour it is to be called and chosen to be the vessels through whom God diffuses the fragrance of His knowledge. And this honour has been granted to the saints because Christ is our sacrifice.
Christ as Sacrifice
Eph. 5:1-2: "Therefore be followers of God as dear children. And walk in love, as Christ also has loved us and given Himself for us, an offering and a sacrifice to God for a sweet-smelling aroma."
So, Christ has given Himself for the saints, as an offering and a sacrifice of a sweet-smelling aroma.
Peter, in his first letter, speaks of the saints as both a holy priesthood and a royal priesthood. As members of a holy priesthood, they offer up spiritual sacrifices which are acceptable to God.
Paul, in his letters, defines spiritual sacrifice. He directs the saints to offer spiritual sacrifices which, he says, are holy, acceptable and well pleasing to God. This is the "reasonable service" of the saints to God, and an analogy of the divine service of the priests of Israel. Also, Paul says he acts as a priest, offering the Gentile saints to God, as a spiritual sacrifice.
The Levitical priesthood, and carnal sacrifices, of the Mosaic covenant are a shadow and a type of the holy and royal priesthood, and spiritual sacrifices, of the New Testament.
Paul depicts the saints as a sacrifice when he speaks of them as "the sweet fragrance of Christ". He speaks of Christ himself as an offering and a sacrifice of a sweet-smelling aroma.
Heb. 13:15: ... "let us continually offer the sacrifice of praise to God, that is, the fruit of our lips, giving thanks to His name."