The term behind the translation “excellencies” is rare in the Bible, but common in secular Greek literature (where it denotes “virtue”). The sense of the term in the present passage may best be reached when we realize that the four privileged identities Peter just listed all come from some combination of Exodus 19:5–6 and Isaiah 43:20–21. Isaiah 43:21 ends with a purpose clause translated as, “that they might declare my praise.” In the Greek translation of this passage, the word behind “praise” is the same term rendered in 1 Peter 2:9 as “excellencies.” But the original Hebrew word denotes the idea of praising someone because of the wonderful things that he has done. So the idea is to talk up someone’s wonderful reputation because of his praiseworthy deeds. In this first section of his letter, Peter has already detailed extensively what God’s praiseworthy deeds are. He sums it up in the closing words of 1 Peter 2:9.
9 But you are a chosen race, a royal priesthood, a holy nation, a people for his own possession, that you may proclaim the excellencies of him who called you out of darkness into his marvelous light.