The incident you asked I suppose is the Westphalia treaty, or the Peace of Westphalia (1648).
In the field of international relations the treaty is widely acknowledged as a big turning point in European history, as it established each nation as a sovereign states which hold sovereignty under its own. It happened before the Enlightenment era and closely related with all the religious discontent that sparked Enlightenment.
Before Westphalia, politics and religion often intertwined. People follow state leaders in the same way they follow their priest. Secular conflicts is seldom far away from religious conflicts. As such, the Pope, as the holder of highest position in religious matter, often acted as the prime authority in dispute between states.
This changed with the rise of Protestanism, as @T.E.D. suggested. Pope no longer have the authority to settle dispute between states as there are several powers which did not recognize Pope's authority. Conflicts between states kept going on, until it became the war now known as The Thirty Years' War, the conflict between Catholic states vs Protestant states.
The Peace of Westphalia was born directly from the war. Europeans realize they need to maintain a stable international political system without direct involvement from religion. This is supported by the Enlightenment zeitgeist that religion should be less involved in politics. There they have thinkers such as Thomas Hobbes and Montesquiue, whose ideas later developed by Thomas Jefferson (of USA).