Why did God give Israel the Law and priesthood?
God gave Israel the Law and priesthood to make them aware of His holiness and sovereignty, and to prepare them for a future role amid the pagan idolatry around them. This set them apart from the world as His favored, chosen people in covenant relationship.
Les explains that God told the nation of Israel He was going to give them the Law, the priesthood, and the whole system of sacrificial worship. The purpose was to make them aware of God's holiness, to make them aware of His sovereignty, and to make them aware that God was preparing them for a future role in the midst of all the pagan idolatry that was now all around them. At that time the whole world was steeped in idolatry except for the offspring of Abraham. In Exodus chapter 19, God said that if they would obey His voice and keep His covenant, they would be a peculiar treasure unto Him above all people. This lifted Israel out of the mainstream of humanity and put them into covenant relationship as God's favored, chosen people.