Oh absolutely. It would have to retain a purely voluntary
  status. But of course, theocracies are always possible unless
  the laws of the State are strong enough to forbid it.... and
  there's no revolution to overturn constitutions. Then again,
  even in "milder" theocracies that are primarily democratic in
  government, there's enough secular elements for a viable
  society. Still, I prefer a freedom-of-religion without state
  control but that's mostly because I was raised in a culture
  promoting it as a value, so it's hard to be totally objective.