As a label for adherence to manmade rules

In addition to the primary definition of legalism (in which it refers to works for salvation), the term "legalism" is commonly used to refer the view that adherence to certain manmade rules is necessary for moral or spiritual righteousness and full acceptance and partnership in the Christian community. While many argue that using the term this way is incorrect, the fact remains that it is commonly used this way. Since the term "legalism" does not occur in the Bible, and since what determines the meaning of words is their widespread usage, this usage should be viewed as a valid secondary meaning.
Regardless of the label that one uses (whether you call it "legalism" or something else, such as judaizing), it is clear that the New Testament condemns demanding that people adhere to manmade rules in order to obtain morality or spirituality in the community of believers or before God. In Mark 7:6-7 Jesus quotes Isaiah as saying, "This people honors Me [God] with their lips, but their heart is far from me; in vain do they worship me, teaching as doctrines the commandments of men." When people teach manmade commands as if they were doctrines from God, and when they insist that others follow those rules for morality or spirituality or acceptance, they are guilty of doing exactly what Jesus condemns here. Most of the debates that Jesus had with the Pharisees, the Sadducees, and the scribes did not center around legalism as it relates to salvation (the primary definition of legalism), but around legalism as it relates to daily living (this secondary definition of legalism), and concerned matters such as washing hands before eating, healing on the Sabbath, fasting, or drinking wine. See also Expounding of the Law.
There are three major kinds of legalism commonly found among religious people. First, there is theological legalism in which people separate from others over issues which the Bible does not say to separate over. (There are doctrines over which the Bible says to separate over or censure others for; in all other areas the Biblical approach seems to be to teach and allow for disagreements. As the saying goes, "In major things, unity; in minor things, liberty; in all things, charity.") Second, there is moral legalism in which people demand that certain manmade moral ideas be followed. (What often happens here is that legalists will take a broad Biblical principle, and then insist that it be applied in a certain way, even though the Bible is silent on that particular issue. For example, if someone were to say that, since the Bible says our bodies are the temple of God, then any action which might not be "best" for the body is a desecration of the temple, and that therefore one must exercise, diet, and rest in such a way as to obtain the optimal fitness. That may be good advice, but it is legalistic — a manmade rule — when it becomes a demand.) Third, there is cultural legalism in which people are expected to live up to certain cultural standards to be accepted and not looked down on. (For example, scoffing at people because they live in trailers or haven't finished high school are examples of cultural legalism since the Bible is silent on those matters.)
While a person might indeed be convicted by God to do something or to abstain from something that the Bible is silent on, and while that person should certainly have the liberty to share that conviction with others and to encourage them to adopt that same personal conviction, the line is crossed into legalism when a person insists that others do the same thing, that is, when a person teaches for doctrines the commandments of men. The Bible censures those who cause divisions over issues that the Bible does not tell us to separate over Additionally, the Bible does not give believers the right to allow others to act as their judges in these matters Plus, it warns believers that such legalisms (manmade rules) are utterly useless in achieving morality or spirituality , and that those who make a habit of submitting to such rules have defiled minds and consciences

Legalism (theology)

Legalism, in Christian theology, is term referring to an improper fixation on law or codes of conduct, or legal ideas, usually implying an allegation of pride and the neglect of mercy, and ignorance of the grace of God. Legalism may also be alleged, in Christian theology, in criticism of theories which are perceived to be excessively dependent upon legal concepts. It represents the opposite extreme from antinomianism, the claim that moral laws are not binding on Christian believers. Simply put, legalism is belief, stated or supposedly implied, that law, not faith, is the pre-eminent principle of redemption. Legalism is often used as a a pejorative term.

In the New Testament

A number of Biblical passages indicate that the tension between legalism and antinomianism goes back to the very beginnings of Christianity.
Jesus directed some of his harshest words at the Pharisees and their accompanying "scribes" and "lawyers," the guardians of the ritual law of Judaism. Matthew 23 is just one of the several sermons Jesus preached against them. The gravamen of Jesus' charge against the Pharisees was that they did, in fact, scrupulously follow the ritual laws of Judaism, but their scrupulousness did not make them more charitable or lead to inner repentance.
Jesus also said that "except your righteousness shall exceed the righteousness of the scribes and Pharisees, ye shall in no case enter the kingdom of heaven." (Matthew 5:20 - part of the Antithesis of the Law - KJV translation) Jesus sought to call his followers to a more inward form of obedience, in which righteous acts stemmed from an inward love of God, rather than a desire to please others, to seem holy in their eyes, or for a fear of temporal or divine retribution. Some have said that this teaching resembles the teachings of some strains of Judaism from the period immediately preceding Jesus, and in particular the teachings of the Rabbi Hillel the Elder.
The tension continues in the epistles of Paul of Tarsus. Paul also had to deal with issues regarding the acceptance of Gentiles into Christianity, and the extent to which Gentile converts were bound by the Torah or the traditional religious rules of Judaism. Paul generally rejected extension of the purity laws of Judaism to Gentile converts, saying that no one should "judge you in meat, or in drink, or in respect of an holy day, or of the new moon, or of the sabbath days." -(Colossians 2:16, KJV) Yet according to Acts 15 Council of Jerusalem he accepted James' decree that new Gentile converts should follow what was later called the Noahide Law subset of the Torah. In Galatians 2:14 (part of the "Incident at Antioch") he publicly accused the Apostle Peter of "judaizing", i.e. Legalism. On the other hand, his writings also contain frequent statements to the effect that those who commit a list of sins "shall not inherit the kingdom of God" (E.g. Galatians 5:19-21), leading to conclusions like 2nd Peter 3:16 . Paul, who called himself "Apostle to the Gentiles", at times seems opposed to the Jerusalem Church of James, John and Peter which has led some to conclude that Pauline Christianity was different from the Christianity of the Jerusalem Church which is sometimes called Jewish Christianity.

In later Christian theology

In Protestant, Evangelical, Christian theology, especially in popular versions of the same, the charge of legalism is an accusation of ignorance of the Christian Gospel, or of unbelief. In that context, to apply the criticism of legalism to a theological position or religious attitude, implies that the accused has over-turned the Gospel of salvation through faith and new life in Jesus Christ, and has substituted some principle of personal merit or ritual purity for the unearned grace of God, see also Cafeteria Christianity.
The Eastern Orthodox, for another example, reject the satisfaction theory of the atonement as legalistic. The satisfaction theory states that mankind's Original Sin violated God's law, resulting in all men being born guilty: an idea prevalent in the writings of Tertullian and Augustine of Hippo. Anselm formally developed the theory that the legal problem of guilt before the Law, required the legal solution of retribution, in order to achieve a just salvation. The solution was for God's son Jesus to willingly die on the Cross in place of humanity, thus allowing the legal penalty to be fully carried out, satisfying the justice of God, and thus clearing the way for mercy to be shown to sinners. The Eastern Orthodox charge that this theory is too dependent upon Roman legal concepts of retribution and justice.
In Roman Catholicism, good works are done in service to God and one's neighbor by faith working through love. In contrast, an excess of severity in the imposition of, or overly-scrupulous conformity to any rule of piety, may be charged with legalism.
Throughout the history of Christianity, certain beliefs and practices have tended to draw charges of legalism. These include:
Ascetic practices such as fasting and other forms of self-denial. Those who believe in these things often defend them as practices that improve concentration on spiritual things and cultivate detachment from the world, and as practices that Jesus apparently expected his followers to continue.
Various ordinances and customs that address subjects not directly covered in Scripture, such as customs disapproving of dancing, playing cards or alcoholic beverages. Believers in these customs often defend them as addressing issues and controversies that have arisen since the Bible was written.
Ritual, such as the use of customary prayers and an elaborate liturgy. Believers in these practices often defend them as traditions with deep roots, and as logical expansions of practices that do in fact have Biblical precedents.
Similarly, the insistence on certain exclusive ritual practices, such as a Saturday Sabbath or adult baptism or Passover (Christian holiday), especially when practicing these rituals is held necessary for salvation.
Sacraments, especially when the underlying theology views them as vehicles of God's grace. Believers in these practices often defend them with the claim that the church was founded by God as the vehicle for grace, and that to reject them is to flirt with the gnostic notion that matter is inherently evil and cannot be a vehicle for God's grace.
Biblical literalism of the sort that underlies Christian fundamentalism.
The degree to which various ordinances of the Old Testament, such as the Ten Commandments, continue to be binding on believers. See also Christian view of the Old Testament Law.
Several underlying dynamics appear in these controversies. The permitted scope of veneration of material objects, versus claims that such veneration is idolatry, affects the perceived sanctity of ritual spaces and objects, and therefore of the rituals and customs themselves. Related to this are competing ideas about whether material things can be good, or are just a temporary evil to be done away with as soon as possible. Teachings about the authority of the church, the sources of legitimacy of that authority, and the role of clergy versus the priesthood of all believers, also affect these debates. Related to these disagreements are debates concerning the authority of the Bible, and whether it is to be interpreted literally or more freely.