This prophecy reflects the story of Gideon. Isaiah says, “All of us like sheep have wandered off,” just like the children of Israel at the time of Gideon. But, he goes on, "Everyone has turned to go their own way, but God caused all of our sin to fall to Jesus to carry.” So as Gideon built that altar and called it, “The Lord is peace,” he was referring to what God was about to do in the land to vanquish the enemy and restore his relationship with his people.
