What is the context?
This instruction belongs to the charge to elders in verses 1–4. They must care for the flock willingly, without greed and without treating those entrusted to them as people to dominate.
The word behind lording it over describes exercising mastery over others. Peter sets being examples against that use of power. A leader’s life should show the character being taught.
The next verse names Christ as the Chief Shepherd. Those caring for the flock remain accountable under Him; they do not take His place as its owner.
How is this passage commonly understood?
Calvin and Wesley both reject domineering leadership. Calvin insists that leaders live under the same standard as those they serve; Wesley specifically rejects treating people’s consciences as a pastor’s domain.
The Catholic Catechism, 1551, likewise describes ordained ministry as service entirely dependent on Christ and measured by His example of becoming the servant of all. Different accounts of church offices do not remove the common responsibility to serve in Christ’s manner.
Where does this fit in God's plan?
In Mark 10:42–45, Jesus contrasts rulers lording it over others with the service required among His followers. He grounds that instruction in His own coming to serve and give His life for many.
Peter’s instruction carries that pattern into the care of the church. Leadership is to reflect the self-giving character of the Savior whose people are being served.
What is our position?
Our studies What Is the True Church? and Who Shepherds the Church? understand leadership as mature, qualified service among the people, exercised through teaching, care and example. Recognized leaders equip believers to serve; they do not become a spiritual class with exclusive access to God or permission to dominate His people.