I take it to mean not returning evil for evil or attack for attack, and further, forgiving those who hurt you. It is obviously one of the hardest things we are called on to do. The passage is preceded by the call to love your enemies and do good to those who hate you, and goes further by calling us to give to all who ask and to “walk the extra mile.” The Golden Rule is the culmination of the teaching.
I live it out in my life by trying to encounter God in each person I meet and treat that person as I would treat God in the situation. Of course, I fail more often than I succeed, especially with those who persecute on an ongoing basis.
Is it applicable to all situations? If it was, and all practiced it, the trouble in the world would cease. I think the hardest part is not even in practicing it for yourself, but in our perceived need to stand up for others, whether others be family, country, church, or God himself. We are called to defend the defenseless, but we often create more victims in pursuing our “righteous cause.” We also tend to get very self-righteous in defending our ideologies and our religions, which I think we all realize is the cause of much of the strife in the world. In the end, it becomes a matter of how to cope with the evil in the world without creating more evil and being part of the problem instead of part of the solution.
I don’t think there is a religion in the world that doesn’t agree that if everyone practiced the Golden Rule and truly treated others as they would be treated, that we would truly have a world where the “lion would lay down with the lamb.”
Peace to you,