Within the context of Matthew 7, Jesus is distinguishing true disciples from those who are not disciples. These false disciples are self-deceived. They’ve convinced themselves that they are Jesus' followers when they are frauds.
Jesus already drew a line in the sand when he tells us there is a good and a bad way to judge. Then, he tells us not to give holy things to “dogs,” (a term referring to people who were not Jews). Then he tells us that everyone who knocks will get in, but that gate is narrow and only a few people enter through it. Then, he tells us that there are true and false prophets. We will know the difference by watching the outcome of their lives.
This brings us to verses 21–23. Just like there are those on the outside, just like there’s a narrow and wide path, just like there are true and false prophets, there will be true and false disciples. Certainly, the worst deception is thinking you know Jesus when Jesus doesn’t know you.
This passage is not saying that someone who has genuine faith will be turned away.
Now to address the second part of the question, what does iniquity mean? The Greek word ἐργάζομαι means ‘work.’ It is a neutral term that could imply good or evil work. Here are 3 other occasions in Matthew’s gospel where the same Greek word is translated:
“What do you think? There was a man who had two sons. He went to the first and said, ‘Son, go and work today in the vineyard.’ - Matthew 21:28
The man who had received five bags of gold went at once and put his money to work and gained five bags more. - Matthew 25:16
Aware of this, Jesus said to them, “Why are you bothering this woman? She has done a beautiful thing to me. - Matthew 26:10
The point is there are a lot of people who claim to work for the Lord, and they fool many people in the meantime, but only Jesus knows if that person has a true relationship with him.
Do you have a true relationship with Jesus?
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