According to the Wikipedia article on sphere sovereignty, the concept of sphere sovereignty is neo-Calvinist.
Sphere sovereignty implies that no one area of life or societal community is sovereign over another. Each sphere has its own created integrity. Neo-Calvinists hold that since God created everything “after its own kind,” diversity must be acknowledged and appreciated. For instance, the different God-given norms for family life and economic life should be recognized, such that a family does not properly function like a business. Similarly, neither faith-institutions (e.g. churches) nor an institution of civil justice (i.e. the state) should seek totalitarian control, or any regulation of human activity outside their limited competence, respectively.
[Historically, the principle of sphere sovereignty developed as an alternative to…] the worldviews of ecclesiasticism and secularism (especially in its Statist form). During the Middle Ages, a form of Papal Monarchy assumed that God rules over the world through the Church.
As far as this goes, the above is perfectly accurate. The history of the papacy is strewn with battles between statist monarchs and ultramontane popes. Statist monarchs attempted to assert their sovereignty in the political sphere by appointing bishops and expecting the Vatican to validate them. Ultramontane popes, for their part, sometimes used sacramental authority to assert positions in the political sphere, not merely for the purpose of supporting a fundamental moral principle, but for little more than extending their patronage or filling the papal coffers. Most of Martin Luther's 95 theses were legitimate criticisms of abuses of power. Although the papacy is a holy office, not all of its occupants approximated that character. Even St. Peter had denied Christ three times.
It has only been through intense struggle, reflection, self-criticism and repentance that the Church has come to recognize the limits of its own authority. No doubt it could continue to sharpen that understanding. The deepest expression of this probably can be found in the Vatican II document Gaudium et Spes ("Joy and Hope"): The Pastoral Constitution of the Church in the Modern World. (Its status as a pastoral, rather than a dogmatic, constitution expresses the point that it is not an expression of dogma. Nevertheless, it is to be accorded immense dignity in Catholic teaching.)
The difficulty has always been the task of mediating these sovereign spheres and establishing natural boundaries and protocols between them. The Church identifies wisdom and conscience as the ultimate authority for each person:
Only in freedom can man direct himself toward goodness. Our contemporaries make much of this freedom and pursue it eagerly; and rightly to be sure. Often however they foster it perversely as a license for doing whatever pleases them, even if it is evil. For its part, authentic freedom is an exceptional sign of the divine image within man. For God has willed that man remain "under the control of his own decisions," so that he can seek his Creator spontaneously, and come freely to utter and blissful perfection through loyalty to Him. Hence man's dignity demands that he act according to a knowing and free choice that is personally motivated and prompted from within, not under blind internal impulse nor by mere external pressure. Man achieves such dignity when, emancipating himself from all captivity to passion, he pursues his goal in a spontaneous choice of what is good, and procures for himself through effective and skilful [sic] action, apt helps to that end. Since man's freedom has been damaged by sin, only by the aid of God's grace can he bring such a relationship with God into full flower. Before the judgement [sic] seat of God each man must render an account of his own life, whether he has done good or evil.
[Translated, of course, from an original Latin of Gaudium et Spes.] In ¶ of that document, the Church declared the basis for sphere sovereignty.
If by the autonomy of earthly affairs we mean that created things and societies themselves enjoy their own laws and values which must be gradually deciphered, put to use, and regulated by men, then it is entirely right to demand that autonomy. Such is not merely required by modern man, but harmonizes also with the will of the Creator. For by the very circumstance of their having been created, all things are endowed with their own stability, truth, goodness, proper laws and order. Man must respect these as he isolates them by the appropriate methods of the individual sciences or arts. Therefore if methodical investigation within every branch of learning is carried out in a genuinely scientific manner and in accord with moral norms, it never truly conflicts with faith, for earthly matters and the concerns of faith derive from the same God. (6) Indeed whoever labors to penetrate the secrets of reality with a humble and steady mind, even though he is unaware of the fact, is nevertheless being led by the hand of God, who holds all things in existence, and gives them their identity. Consequently, we cannot but deplore certain habits of mind, which are sometimes found too among Christians, which do not sufficiently attend to the rightful independence of science and which, from the arguments and controversies they spark, lead many minds to conclude that faith and science are mutually opposed.
Pope John Paul II would later validate this vision in his encyclical, Fides et Ratio [Faith and Reason]. Treating the question of the sphere sovereignty of faith vs. philosophy, the Pope said (¶ 53):
The Magisterium's pronouncements have been concerned less with individual philosophical theses than with the need for rational and hence ultimately philosophical knowledge for the understanding of faith. In synthesizing and solemnly reaffirming the teachings constantly proposed to the faithful by the ordinary Papal Magisterium, the First Vatican Council showed how inseparable and at the same time how distinct were faith and reason, Revelation and natural knowledge of God. The Council began with the basic criterion, presupposed by Revelation itself, of the natural knowability of the existence of God, the beginning and end of all things, and concluded with the solemn assertion quoted earlier: “There are two orders of knowledge, distinct not only in their point of departure, but also in their object”. Against all forms of rationalism, then, there was a need to affirm the distinction between the mysteries of faith and the findings of philosophy, and the transcendence and precedence of the mysteries of faith over the findings of philosophy. Against the temptations of fideism, however, it was necessary to stress the unity of truth and thus the positive contribution which rational knowledge can and must make to faith's knowledge: “Even if faith is superior to reason there can never be a true divergence between faith and reason, since the same God who reveals the mysteries and bestows the gift of faith has also placed in the human spirit the light of reason. This God could not deny himself, nor could the truth ever contradict the truth”.
Thus, in questions like the existence of God and questions about God, faith takes priority over philosophical reasoning. In effect, it says that questions about God are in the sphere of faith, which is the sovereign in that sphere. To fully articulate that position, of course, the Church must define what faith is in this context. The Holy Father does this in Chapter 1, "The Revelation of God's Wisdom," of the encyclical. If I may summarize (which, of course, is no substitute for reading the Pope's own words),
When interpreting the term faith, then, we are not so much referring to a psycho-spiritual phenomenon as a kind of content and operational protocol which speaks of the relationship of God to man. The priority of faith is therefore seated in its ultimate source, God. If we apply the same operational protocol analysis to philosophy, we recognize that, although God is the author of truth and of reason, philosophical truth (which is, by its nature, a human interpretation or model of reality) is not first given by God but by philosophers who may or may not be attempting to discern the mind of God and in whom God has vested no special authority. None of this relieves the individual believer/reasoner of the responsibility of coming to terms with these sources in a way that accords each its proper dignity and in a way that harmonizes them and resonates with each person's interior sense of the truth.
The feasibility of this task of harmonization is rooted in the fact that God is the ultimate author of reality, as Pope John Paul says. Properly received faith, therefore, cannot contradict properly grounded reason. The Pope, therefore, stressed the importance of both and of harmonizing both.
If the Magisterium has spoken out more frequently since the middle of the last century, it is because in that period not a few Catholics felt it their duty to counter various streams of modern thought with a philosophy of their own. At this point, the Magisterium of the Church was obliged to be vigilant lest these philosophies developed in ways which were themselves erroneous and negative. The censures were delivered even-handedly: on the one hand, fideism and radical traditionalism, for their distrust of reason's natural capacities, and, on the other, rationalism and ontologism because they attributed to natural reason a knowledge which only the light of faith could confer. The positive elements of this debate were assembled in the Dogmatic Constitution Dei Filius, in which for the first time an Ecumenical Council—in this case, the First Vatican Council—pronounced solemnly on the relationship between reason and faith. The teaching contained in this document strongly and positively marked the philosophical research of many believers and remains today a standard reference-point for correct and coherent Christian thinking in this regard.
We should also note that the very analysis (particularly in the abstract) of the protocol of reception is only partly, albeit primarily, a philosophical task, since the reception process is itself influenced by the movement of the Holy Spirit throughout. The very same information, provided in the documents of scripture, tradition and the Magisterium, can be received very differently by different people, depending on a variety of factors, not the least of which is the mode of thought and the internal models of reality with which the receiver currently feels comfortable. These "preconceptions" amount, in practice, to a bias regarding the quality or validity of sources. It is rare to find a subject who will suspend all judgment on the sources until a deep insight into their inner harmony is received. Lacking such an insight, nearly everyone chooses or prefers those sources that seem most right to them at the time, and indeed usually does so without serious conscious reflection.
God, who knows all of this, chooses to speak to each of us, whether directly or through an intermediary, at a time and in a manner intended to enhance our reception. Since God is not the only actor on the stage, that gift of faith can be intercepted, forestalled or otherwise corrupted by the influence of others. It is possible, therefore, for an honest person to die without having received faith, or only having received it in an effectively unusable form. Jesus' condemnation of "judging" is therefore very broadly received by the Church, and in spite of this, the Church insists that, even though individual error is so likely, the individual conscience must not be violated. Rather, individual judgment in matters of faith is to be accorded the greatest possible dignity and freedom consistent with basic public order.
The concept of sphere sovereignty itself does not touch upon the question of authority vested in individuals, such as the Pope. Its application to faith and reason is also not dictated by the concept. What I have attempted to do here, rather, is to identify Catholic teaching about the relationship between faith and reason via the interpretive concept of sphere sovereignty.