Jesus also, that he might sanctify the people with his own blood, suffered outside the gate. Therefore, let us go forth to him outside the camp, bearing his reproach. For we have no continuing city here, but we seek one to come.
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There are people who are in your heart: people whom you love, people whom you respect, people whose company makes you happy, and even people in authority whom you fear. There are also things in your heart: activities that you enjoy, memories that you fondly recall, places you like to go, favorite foods and seasons, and a hundred other such things. All of this is good and right. We were created to have people and things in our heart.
In the past, I must have thought that to "let the peace of God reign in your heart" meant that no one and nothing else was to be in there. But what I learned was that this exhortation from Paul means simply that our feelings and conduct toward the people and the things in our hearts are to be subject to the peace of God. It means that the love or hate or fear we have in our hearts for anyone or anything is limited and controlled by the peace of God. It means that we are to refrain from enjoying our favorite food if doing so disturbs the peace of God within us. It means that the people who are in our hearts do not control us and our decisions; rather, our life's direction and decisions are based upon what is in harmony with the peace of God. It means that we choose to keep peace with God over everything else on earth.
Paul had God's people in his heart so deeply that he was willing to die for them. Sometimes, they made him weep with grief when they were misled and then made foolish choices. He loved Israel so much that he said that he would have traded his soul for them, if they would only believe. Even at that, the people he held dear in his heart did not have such influence over him that they could lead him into sin. His peace with God would not allow that. He refused to allow anyone to sit on the throne of his heart but the Prince of Peace. He would take a brother or a sister into his heart, but not to rule, not to influence to sin, not to lead.
Where the peace of God rules, there is no sinning. If Jesus is on the throne of your heart, nothing can make you do evil. "Let the peace of God rule in your heart", then, is only a commandment that means to love God first, with all your heart. And it is certain that if we do not, something or someone else who is in our heart will influence us to do something that is wrong.