Theocratic Government.....Good or Bad?

A Theocratic government can be seen as a government that is organized around a certain religious aspect. In my way of seeing it, it seems to be the opposite of out "seperation of church and state". To me, I see very little advantages of the theocratic government. I do think that the disadvantages outweigh the advantages, overall.
The fact of organizing a government around a religious belief, would also mean that they would have religious officials to govern their civilization. Therefore religious leaders were always known to be very intelligent. I would assume that the overall structure of this government,(when talking about some 1500+ years ago) would be considered very well organized. Whenever the same civilization is also centered around a religion, one can only feel that the rate of murder, and other crimes would also be much, MUCH, lower than others.
When looking at the disatvantages, however, the theocratic government seems to have to many flaws to really stand firm in todays world. The main disatvantage that I believ is that it is hard to govern a large population under a religious belief. Whenever you deal with a very large amount of people, the number of different beleifs increases. This diversity of religious beliefs, singles many people out, or in other words, pushes them away from the civilization. This leads to the disatisfaction of those people. Whever you do push aside these people in the civilization they are forced to take ahold of a different religous aspect, in turn would then be going against their own government that they should be participating in. This always has leaded to internal conflict of the civilization. To me this one disatvantage outweighs all of the advantages that are seen in a theocratic government. Other small disadvantages are that there is little room for freedom to speak outside their certain belief, the encouragment to explore religions is not present, and not to offend anyone but a theocratic government is society that is basically orgainized not on facts but around a certain hope or belief.