Threats of legal action forced officials in Wilkes-Barre, Pa. to remove a nativity scene and a menorah from a courthouse lawn.
The American Civil Liberties Union and Americans United for Separation of Church and State said putting religious symbols on government property is an endorsement of religion.
Lucerne County commissioners said they can't afford a legal fight, so they took the displays down.
"I don't think this was just about the county avoiding legal fees," said Richard Katskee, an attorney with Americans United.
"When government decides to do the right thing and recognize that there are people of a lot of different faiths in the community and that it should respect them, that's the government doing its job," he added. "That's deserving of praise and it seems like that is the case here."
However, one day after the displays were removed County Commissioner Stephen A. Urban said they should have stayed, the Citizens Voice reported.
"I believe that this should've been litigated," Urban said. "I think the people of this county are outraged and rightfully so."
Sharon Leahey,60, runs a business in Luzerne Borough.
"I'm appalled and upset," Leahey told Citizens Voice. "Immediately, everybody caves in. I want something done. This is ridiculous. There is so much corruption you think someone would finally stand up and do the right thing."
The displays were owned by the county and have been placed on the property for decades.