The title likely comes from the book "Stranger in a Strange Land" published in 1961 about an alien from another planet growing up on earth. Much of the lyrics draw similarities to Jesus being born into a world of Roman occupation & the brutal puppet government in place at the time.
"When the baby looks around him, it's such a sight to see, he shares a simple secret with the wiseman"
Referring to the wisemen who came to see Jesus. The secret they shared was that Jesus was the Messiah. Also both the wisemen and Jesus could see the hypocrisy of those times just as Leon is singing about the hypocrisy of the late 60's.
"When the baby looks around him, he shares his bed of hay with the burro in the palace of the King"
Refers to the story of Jesus being born in a manger with the barn animals because there were no accommodations in the town at the time. The lyric, "in the palace of the King" may be talking about the manger itself with Jesus, the future 'king' of the Jewish people sent down from heaven to deliver them from the persecution they were enduring.
I believe the last verses of the song are a cry against the turbulent events of the times. The Vietnam war was in it's crescendo. Government oppression was widespread. Thousands of nuclear weapons threatened our very existence. The deaths at Kent State had just occurred the previous year, rampant pollution, greed and corruption were everywhere.