The second psalm is a warfare psalm; it is about a heated conflict between the LORD and his people, on the one hand, and adverse forces of evil, on the other. For the psalmist, these forces of evil are the nations and the peoples, the kings o the earth and the rulers (Ps 2.1-2). These powers set themselves against the LORD and his anointed and seek to loosen the bonds from around them (v. 2).
The response of the LORD, of course, is to laugh at their weakness and to mock them. His response to their plots is to establish a king on Zion (v. 6), and he tells this newly chosen king: You are my son; today I have begotten you. Ask of me, and I will make the nations your heritage, and the ends of the earth your possession. You shall break them with a rod of iron, and dash them in pieces like a potter's vessel (vv. 7-9). The establishment of the king, therefore, comes with a promise of inheritance: the peoples and the whole earth belong to the Son of God; he is free to do with them as he pleases, and the LORD will be with him.
It is impressive, therefore, to understand how this narrative of coronation and inheritance plays out in the case of Christ, who is anointed Son of God at his baptism. As he was undergoing baptism by John in the Jordan River, a voice cam from heaven, "You are my Son, the Beloved; with you I am well pleased" (Mark 1.11). This is a direct echo of Ps 2.7, and to my mind it means that Christ's baptism is his anointing as king of Israel, Son of God.
Now if Christ is anointed King of Israel, then he is likewise promised the nations as his heritage. But how does Christ make use of this inheritance of his? Far from dashing them in pieces, Christ heals the sick, forgives sins, teaches the ignorant, and above all, gives his life for them: For the Son of Man came not to be served but to serve, and to give his life a ransom for many (10.45). What goodness, what generosity, what mercy, that the king of the world should die for its sake!