The Millennial Kingdom will be populated by three “categories” or “types” of people
A) Christians raptured into the air at the close of the Church Age who then return to earth with Christ during his Second Coming to fight the Battle of Armageddon. They will remain on earth and enter the Millennial Kingdom. Each Christian will have a glorious new body fashioned after Jesus’ resurrected body (Phil. 3:21).
B) Believers (both Jew and Gentile) who died before the Day of Pentecost (Acts 2) and believers who will die during the Tribulation. These believers will be resurrected and transformed into immortals during the First Resurrection, which occurs after the Battle of Armageddon (Ezek. 37:12–14; Rev. 20:4–6). This category includes believers such as Abraham and Sarah, Moses and Miriam, Joshua, Ruth, Samuel, David, Esther, Daniel, and those murdered during the Tribulation for their refusal to worship the Beast (Rev. 13:15).
C) “Natural” or mortal believers who survive the Tribulation and the Battle of Armageddon and are judged “righteous” (Matt. 25:31–46). This category will include both Jews and Gentiles. The term “natural” is used to provide a distinction between these people, who are mortals, and the people who are no longer “natural” but immortal, namely, those in categories “a” and “b”. These “natural” people will experience the same life cycle of all mortals. They will grow, mature, marry, procreate, age, and die (Isa. 65:20–25).
The Bible makes it clear that there will be survivors after the Tribulation and the Battle of Armageddon, and some of them will be judged righteous and allowed to enter Christ’s Kingdom. This point must be understood because some Christians teach that after the Battle of Armageddon no one will be alive on earth. This is clearly not the case. Yes, the majority of the people of earth will be dead, but as Isaiah 13:12 and 24:6 say, there will be survivors, “very few,” but there will be survivors. There are more than six billion people on earth at this time, so “very few” could easily mean a few million or more. Matthew 25:31–46 implies that there will be a significant number because the “nations” will be brought before Christ at the start of his 1,000-year reign.
Because there will be no war and plenty of food, these survivors will multiply rapidly and will repopulate the earth. In fact, they will multiply to such a degree that by the end of the 1,000 years they will be as numerous “as the sand on the seashore” (Rev. 20:8). This growth in population should not be surprising. In the Old Testament, Israel entered Egypt as a group of seventy people (Gen. 46:27). When they came out they numbered about three million. This significant increase in population occurred under horrible conditions. If a few million are present at the beginning of the Millennial Kingdom, imagine the growth potential when the prevailing conditions are peace and prosperity!
As mentioned earlier, it will be the “natural” people who will make up the nations. Because they will still be “natural,” they will be subject to the weaknesses of a mortal body, and will still be prone to sin. Therefore, even though they are living in Paradise, they will need to be ruled “with an iron scepter.” Christ will not be cruel or mean, but he will “rule with an iron scepter” by enforcing the laws so that there is no crime, and people can live in safety and security. In the King James Version, these words are translated as the familiar phrase, “rod of iron.” The phrase “iron scepter,” or “rod of iron,” occurs in four verses: Psalms 2:9; Revelation 2:27; 12:5; 19:15. The application of the iron scepter can be seen in the following verses: Isaiah 11:4; 14:2; 49:22 and 23; 60:10–14; 61:5 and 6; 66:12; Micah 7:14–17; and Zechariah 14:16–19.
Prophecies of Christ ruling with an iron scepter are strong evidence that there will be a Millennial Kingdom populated at least in part by unsaved, mortal people. In addition, it should be obvious that these prophecies must apply to the future because they were not fulfilled during Christ’s first coming. In spite of the many clear verses on this subject, there are some people who do not believe that the 1,000-year reign of Christ on earth is literal, and others who do not believe the Kingdom is coming in the future.  If either of these beliefs were correct, then the only people available for Christ to rule with an iron scepter would be the saved believers in the Everlasting Kingdom. Being ruled with an iron scepter is not the way most Christians envision everlasting life. Thankfully, that is not how the Bible portrays it either. It is the unregenerate, “natural” people alive during the Millennial Kingdom who will need to be ruled with an iron scepter. 
The need for the iron scepter is due to the fact that these “natural people” still have a sin nature that causes them to be selfish and sinful. Although they will live in Paradise, surrounded by bounty, many of them will still find reasons to complain. That is not unusual. Both history and the Bible teach that there are many times when people who should be happy because they are healthy, well fed, and financially secure are still unhappy and find reasons to complain constantly. The presence of these “natural” people in the Millennial Kingdom explains in large part why there will be disputes in the Millennial Kingdom (Isa. 2:4; Micah 4:3). The book of Zechariah says that if any nation selfishly decides not to go and worship in Jerusalem, then that nation will have no rain (Zech. 14:17). This is an example of the natural selfishness and “can’t be bothered” attitude prevalent among “natural” people. It is also an example of how Christ will wield the iron scepter. At the end of the 1,000-year period Satan is loosed, and he will deceive many of these “natural” people and incite them to rebel against God and His people. Their rebellion will fail when they are destroyed by fire from heaven (Rev. 20:7–9).
The presence of these natural people in the Millennial Kingdom also helps explain why there will be priests (Ezek. 42:13 and 14; 44:15–31; Rev. 5:10). A priest, by definition, is someone who intercedes or mediates between God and another person. Aaron was a priest because he stood between God and Israel. If everyone in the Millennial Kingdom has a new, everlasting, regenerated body and an intimate relationship with God, there would be no need for priests. Since there will be many “natural” people in the Millennial Kingdom, priests will be important.
Some Christians do not believe there will be two literal and distinct kingdoms in the future because, to them, it does not seem possible to have “natural” people (mortals), and immortals alive on the earth at the same time. So they take verses like those cited above and “spiritualize” them by saying they are figurative and not literal. There is no justification for handling these verses in that manner. They are written very clearly and do not have any of the aspects of figurative language. Just because something God says about the future is hard to believe or hard to understand does not mean it is not literal and true.
 Some people erroneously believe that the 1,000 year reign of Christ on earth is happening now in a “spiritual sense.” Robert Clouse, ed., The Meaning of the Millennium (InterVarsity Press, Downers Grove, IL, 1977), pp. 155–87.
The fact that Satan, when he is loosed at the end of the Millennium, is able to corral an army of disgruntled rebels is evidence enough that unregenerate mankind will be a part of the Millennial Kingdom.