I think you actually want to do the exact opposite of what you're thinking.

In this 2009 Gallup poll, let's compare a few countries.

Percent of adults who answer "yes" to "Is religion an important part of your daily life?":¹

• Sweden: 17%


• Denmark: 19%


• Norway: 21%


• UK: 27%


• Netherlands: 33%


• Germany: 40%


• USA: 65%


• Turkey: 82%


• South Africa: 85%

And what you see is that the more a free country does to establish its official religion (while still allowing freedom to others), the less religious the people are.

So, here's what I'd suggest:

• A Lutheran² state church, the Church of Albertland.


• Everyone is an Albertican by default. You're perfectly free to worship otherwise, but you have to file out paperwork to be taken off the Church's official rolls.


• The King (a powerless figurehead, but important to the people) must be Albertican—for traditional reasons, of course, but also because he's the figurehead of the Church as well as the State.


• The ceremony investing a new King is highly religious.


• Government holidays are officially based on the Church's holidays.


• Any member of the Church of Albertland can tithe up to 10% of their income to the Church.³

This is loosely based on an amalgam of the Scandinavian/Nordic and Benelux countries through most of the 20th century.

Also, notice that Sweden, after partial disestablishment in 1996 and complete disestablishment in 2000, has been becoming more religious again.⁴ So, don't stop until you get all the way there. :)

Of course if you throw in more countries (or just look at the title of the survey's release publication), you find that there's another, even higher-correlated factor.

Quality of Life is the best predictor of low religiosity. (Low crime, low income equality, high literacy, and other factors also correlate well, but then they also correlate well with Quality of Life.)

So, you might want to just create a utopia where poverty is nearly eradicated, crime is at an all-time low, people live in clean and pleasant spaces, and everyone feels engaged in their government. That might have some nice side benefits besides reducing religion.

_{1. I skipped states that aren't free in the first place, and states that had, e.g., three generations of Communist government trying to stamp out religion, and Catholic states (but notice that Germany includes Bavaria, which might affect their position…). But even if you include everyone, only Estonia and Czechia are in the same ballpark as the Scandinavians.}

_{2. Calvinism, and whatever you want to call Anglicanism, will apparently work too.}

_{3. In other words: Everyone just pays their income tax, the same as always. But if you check the box, or are an official CoA member, or whatever, the government takes part of your tax check—the first 10% of your income—and gives it to the Church instead of putting it toward the general func. I'm assuming rich people don't pay less than 10% income tax, so this might not work in the USA, but then you've got bigger problems…}

_{4. Although much of this is due to first-generation immigrants with Catholic, Eastern Orthodox, or Muslim faith, and much of the rest is people joining the Free Churches, not rejoining the Lutheran.}

Fill the needs that religion provide for

The foundation of irreligious criticism is: Man makes religion, religion does not make man. Religion is, indeed, the self-consciousness and self-esteem of man who has either not yet won through to himself, or has already lost himself again. But man is no abstract being squatting outside the world. Man is the world of man – state, society. This state and this society produce religion, which is an inverted consciousness of the world, because they are an inverted world. Religion is the general theory of this world, its encyclopaedic compendium, its logic in popular form, its spiritual point d’honneur, its enthusiasm, its moral sanction, its solemn complement, and its universal basis of consolation and justification. It is the fantastic realization of the human essence since the human essence has not acquired any true reality. The struggle against religion is, therefore, indirectly the struggle against that world whose spiritual aroma is religion.

Religious suffering is, at one and the same time, the expression of real suffering and a protest against real suffering. Religion is the sigh of the oppressed creature, the heart of a heartless world, and the soul of soulless conditions. It is the opium of the people.

The abolition of religion as the illusory happiness of the people is the demand for their real happiness. To call on them to give up their illusions about their condition is to call on them to give up a condition that requires illusions. The criticism of religion is, therefore, in embryo, the criticism of that vale of tears of which religion is the halo.

Karl Marx — From the introduction to A Contribution to the Critique of Hegel's Philosophy of Right, 1844

This is a very difficult passage so I have highlighted the core. Religion is not merely pointless delusion; it fills certain needs that humans have.

• We ask difficult questions...

There are, of course, many problems connected with life of which some of the most popular are, “why are people born?”; “why do they die?”; and “why do they spend so much of the intervening time wearing digital watches?”

Douglas Adams, the Hitch Hiker's Guide to the Galaxy radio play, fit the fourth

• We want to know how do the right thing towards one another.




• What happens after we die? Is that really annihilation, or do some part of us and our loved ones continue on?




• What are we supposed to do while alive, apart from surviving? Is there something we are meant to do?




• What really happened at the start? How did life come about? How will it all end? What is beyond that which we can see?




• Help, my child is dying, please save them!

If you want to defeat religion, you have to make sure you provide something better.

1. Revoke all religious privilege

Churches thrives mostly in part because they still enjoys privileges that few other organisations have. You need to fix this:

• 
  

  No state sponsorship

  
  
  
  • Abolish the state church
    
  
  
  • Make churches be opt-in, not opt-out
  
  
  • No tax collection for the benefit of any church
  
  
  • No tax breaks for churches
  
  
  • Do not allow minors to be a member of any confessional. Entry into a congregation must be a conscious choice made by a consenting adult.
  
  
  • Make everyone that has not entered the church by their own volition (such as on birth or by their parents) be non-members. If they want back in, they must apply for it, when they reach the age of full consent.
  
  


• 
  

  No legal privilege

  
  
  
  • Religiously inspired arguments may not be used for legislation
  
  
  • Abolish all blasphemy laws
  
  
  • Make religious groups not be protected groups
    
  
  


• 
  

  No educational privilege

  
  
  
  • Abolish religious instruction in school. Religion may not be taught as fact.
  
  

  • Enforce religious studies in schools, teaching about religions, as many as you can fit in. Teach about where the religions have gone wrong and encourage children to find logical errors and inconsistencies in the religious teachings and texts.

  
  

  • "Faith is not a virtue". Make it a "sin" to take things on faith, foster a spirit of science and enquiry.

  
  

Constitution of India, Part IVA, Fundamental duties, exerpt

It shall be the duty of every citizen of India —

• To develop the scientific temper, humanism and the spirit of inquiry and reform

Most importantly: enforce all of the above with the strictest of vigilance. Any hint, suggestion or argument against any of the above will be met with fierce opposition.

2. Challenge and undermine religious claims

Religions makes claims. All religions claim: "This is the way things are, this is how we should make them be, and here is how we and you should go about achieving that".

Break that down, all of it. Remove religion from the public discourse by harshly attacking any and all claims that stem from faith.

— We should permit [questionable practice]

— Why?

— We should do that because it is in accordance with the holy scripture and the divine will.

— No no no, if your deity wants to have a part in this debate, then they must bloody well come here and make the argument themselves! Not good enough.

And as it happens, there are lots and lots of people that love to tell people that they are wrong about things.

xkcd #386: Duty Calls

Endorse, aid and support any and all skeptical and religiously critical organisation you can find. Skeptics and humanists in particular. They will do a great job for you in undermining religion. Just give them a platform and you will get earnest and well read arguments against religious influence.

3. Become religion's best defender

This sounds paradoxical, but do consider that there are literally thousands of different denominations around the world. What you do is you say "We are not giving more or less privilege or hindrance to any one particular religion... all are equal. We will give everyone equal rights and equal protection".

First, this means that no denomination can claim that they are the bearers of The One Truth™. They cannot elbow their way ahead and claim more room than anyone else. They must all share the public attention equally. They cannot muscle their way over any other denomination.

Second, parody religions will sprout like weeds, highlighting the ridiculousness of religious practices.

Member of the Church of the Flying Spaghetti Monster wears official religious headdress on driver's license, as exempted for in Utah

With this you essentially reduce religion to be no better than people's bare opinion, since your choice of religion is a subjective, opinionated choice

4. Provide a better alternative

This is the hard part. What you have done above is just to take away religious influence. Now you need to fill the void with something else.

You must provide the following:

• A sense of community


• Non-religiously inspired ethics and morals


• Answers to hard questions
  
  
  • Let "We do not know. We are working on finding that out" be an acceptable answer
  
  


• Effective healthcare that saves people from (apparent) certain death


• Comfort in times of anguish and sorrow


• Non-religious disaster aid, that outshines the religious counterparts


• Non-religious holidays, reasons for joyous celebration


• Non-religious culture
  

5. Believe

You need the believe that all of the above is done for the betterment of society. You are doing it for the people, for the children, for the weak and disadvantaged, for every citizen in your realm. Let it be indoctrinated into every person that holds an office of some sort; every into official that is in service of the state, that this is for the good of the people.

Finally... should this message be indoctrinated into the people? I would say: no. People tend to be stubborn and get into opposition of the people in authority say you should feel. So on the contrary: avoid making public pronouncements that your aggressive anti-theism is for their benefit, because that will just make them suspicious. Keep the indoctrination to the officials, and let the people just follow without knowing that this is what they are doing.

Leverage state-controlled media, police force and intelligence

You don't need changing the laws. Accidents happen, however lately they seem to converge on religion practitioners. Start with your own supporters by being openly atheist, anybody would want to mean something will follow ...or fall. You can improve the effect by founding some state-run organizations for wide public offering company of like-minded people and answers to your problems (support your dictator!).
Next up, opposition:

You know that famous religious activist that "spends all his time on charity"? It would shame if some evidence would be miraculously found he has been embezzling the charity's money.

The news would broadcast stories about religion being full of charlatans: Miracles explained by science (bonus points: it was 'proved' to be a trick - fishing lines tied to crosses were found, etc.), terrible death records of faith 'healers', you name it. Likewise make sure any real crimes made by clergymen make it to the front pages.

tl;dr: dont (just)ban, show your people which way is the wrong one and offer an alternative which leads to success (like yours) at the same time. Painting all clergymen immoral charlatans while offering an state-run alternative organizations for people to flock under should do the trick.

You've already listed most of the methods to reduce the impact on religion and Justin Thymes comment pretty much stops the rest.

I think the biggest issue would be that there are some close knit religious groups who support each other by offering shelter, jobs and security among themselves. You could stop this by having a job registry, where all jobs must be advertised via this registry and the registry will decide who is best suited towards a job (basically a national hiring agency). All jobs must go through this registry. This allows you to mix more religious people into more open settings and hopefully this educates them and helps them become less religious.

Another key point you brought up is education. I'm not sure on any official data, but I believe that the more educated people are the less likely they are to be religious. So education is key. Teaching not just creationism, but evolution and the formation of the universe would definitely help with that. In particular, teaching about all religions equally might bring about some interesting consequences. That way you might logical reach a conclusion that Gods aren't real because there are so many different ways the universe was created by Gods.

You could also force all buildings to share similar appearances (overly aggressive home owners association anyone?) and this includes temples, church and places of worship, After all it shouldn't be about the outside appearance but the act/gestures you perform inside. Basically remove symbols of religion from out country arguing that it ruins the appearance of a street or maybe forces religion on another person who might just look at it.

You can also do things like actually enforce the separation of church and state removing anyone with religious ties from high positions and replacing them with none religious people (Stares sadly at america). You could argue that this way, their decisions will be based on facts about issues, rather than arbitrary laws of a non-existent god. You could also combine this with a no false or misleading advertisement rule that will stop any form of media from advertising or broadcasting advertisements and promotional bits related to religion because it is misleading in its teachings. (also to stop those televangelists).

Finally you could also promote the use of certain words like God and Christ and incorporate them into swear words. While it doesn't really impact the religious beliefs so much, it should erode the meaning and impact of the word itself. Like is Jesus Christ was a word that was associated with disasters, it will become less associated with the actual religious figure when its used very commonly in everyday life. (kind of like how swear words are used so often now-a-days they basically aren't swear words anymore).

How About Jizya?

This one has the benefit of being historical.

You say that your goal is to reduce religion, so I'm taking that as meaning that eliminating it altogether runs counter to the goal, so why not a jizya against all religions?

Jizya was a policy put in place by the Ottoman Empire on dhimma (generally Jews or Christians, but could be any non-Muslim), only you're going to put it on all religions. It's a special tax because protecting religious freedom isn't free, and it doesn't make sense to force non-believers to pay for that, right? It doesn't even need to be an extreme tax; it could be rather modest so as to not upset international relations too much.

This has the effect of scaring away all casually religious people while not discouraging the die-hards. Societal pressure to "conform" will now push people away from religion instead of towards it. Religious people will still exist, and still be free, but their numbers will go down somewhat.

Introduction

There are several common misconceptions about this topic, inviting some answers and comments which are not more than tribal signaling ("look, I also don't like religion, so I mumble something about science and education, and how religious people hold stupid obsolete beliefs which will be soon eradicated by science!")

There has been indeed a significant drop in church attendance in the Western World during the last 30-40 or so years. (it seems the question is mostly focusing on this, and asks for an alternate history where this process would be much stronger). So, let's study the causes of this process, in order to envision a world where this effect was stronger.

So, why did church attendance and the importance people assign to religion drop so much during the last few decades? For some it would be tempting to say "Science! In the old days people didn't know anything about how the world functions so they invented gods, they thought they are living on a flat plate in the center of the universe with supernatural beings sitting on the clouds, but science has shown us how the world works instead!" - this is of course utterly wrong, and not much more than a severe misunderstanding (or even strawman argument) about how religious people think.

Causes?

Take a look at the last few decades in the Western World. Is scientific literacy really better now than it was a few decades ago? Everyone knew what causes lightning, no one thought it was the deity of thunder. Everyone knew about the shape of the Earth, the Solar system, everyone knew about bacteria and viruses. I would even bet that people knew more basic scientific trivia (names of the planets, space programs, and so on) a few decades ago than now, merely because of the sheer amount of information and entertainment dumped on us today makes people less focused. With the recent explosion of moon landing denial, anti-vaccination, alternative medicine, and flat earth beliefs (very few of their adherents having any religious motivation at all) it seems that scientific knowledge among the general public might be even lower now than it was a few decades ago.

You know what else dropped at a similar rate as church attendance? Time spent with friends and family. Time spent relaxing in nature. Was it also because of people "waking up from a life of medieval misinformation"?

No, it's simply because the current world offers a lot more distractions, more affordable entertainment, and a lot more ways to fulfill our needs (real or perceived).

The difference

In order to have a world with less religion, that world has to have more ways to fulfill the needs which religion fulfills.

There was and is and will always be a hardcore group of people who believes no matter what, and one who doesn't believe, no matter what. The majority is in between. They practiced religion for the needs it fulfilled: a sense of community, a scene where they can meet and socialize, a sense of belonging to a group, and maybe some longing for a spiritual experience.

Now, thanks to the internet and more affordable entertainment, people have less time and feel less need to think about things they cannot immediately use or consume. They have a quick access to fulfill their desires almost instantly. There remains no longing for something more.

Now, thanks to more wealth and less day to day hardship, people can afford to live alone, and to rely less on other people. They feel less need for a community.

Propaganda against religion rarely works. Enforcing or brainwashing people to believe that religion is evil? Seriously, now I'm asking all atheists who read this: how many times did it happen to you, that you went up to some religious people, pointed out what you believed to be a big inconsistency in their religion, told them their beliefs are stupid, and then they suddenly went "wow, thank you for pointing it out, from now on we are no longer religious"?

What works is other things fulfilling the needs which religion fulfilled. For better or for worse. Because it will reduce many other things besides participation in religion.

Note: the main weapon against religion is not atheism. It's materialism and apathy.

Your world

So what do you need? The changes in the entertainment industry, wealth, materialism and society which already happened in the real world, but in a more exaggerated way. Make even more ways for people to occupy their time. Make them feel even less need for social contacts. Make the world faster. Give people so many choices to fulfill their immediate desires that they don't feel the need for something deeper. There will still be people who feel a need for spiritual experiences, but you can fulfill it with astrology, or with an amalgamation of various philosophies, including religions, in a way which is no longer religion, but the spiritual aspects of many religions mishmashed into some easily consumable package, which leaves the core concepts of the source religion completely out.

If you have plenty of money , make people more technlogy oriented i.e -

1) Give free High speed fiber net all citizen's.

2) Free Gadgets like Laptops , mobile etc . This is to make all citizens gadgets freak . Like always new technology to be provided .

3) Create more programming jobs , start paying them high . Because once people start coding they get everything is fair in this world ," you do mistake then you get errors ". People will learn there lesson and be more logical and forget about God which exists now.

4) Promote sci-fi movies and new movie techonogly , when people can see how wild there imagination goes they feel like god and forget about god which exists now.

There is one important real life example that I did not see mentioned in the other answers and that is eastern Germany. Even decades after the fall of the Berlin wall, you can still clearly identify the former GDR by just looking at a map of Germany,
colored by religious views, even though both halves should have started on roughly even levels half a century earlier.

The state also fits your idea of a "moderate dictatorship". While the ruling party generally wasn't beyond throwing dissidents and opposition into jail (or even sentencing them to exile or death), most of the population lived comparatively (to other similar regimes) safe and free. Essentially as long as you (or members of your family) did not speak up against the government and its ideologies, you were guaranteed a normal boring life, that is education, a fixed job, a home and maybe at some point even your own car or the opportunity for a holiday in a far away (socialist) country.

The main reason for irreligion in the GDR seems to be directly linked to this. Since most of your fate is state controlled, to become somebody, you'll have to appear like a model citizen. Sure, you can actively participate in your church (They tried to forbid this initially, but quickly relented). But thanks to the Stasi, the state will take note of this. And if you want to go to university or get a promotion in your job, they will then look at your file and tell you about Marx' and especially Lenin's views about religion and how you do not seem to be quite suited for such an important socialist position.

This essentially was an open secret. So while many may have still practiced their religion in private, they will have tried to look like a modern atheist in practice.

Now add one or two generations. You grow up in a place where most people outwardly appear to be atheist. The few people you see, that still go to church never seem to have achieved anything in life. In school you are taught that religion is just the "opiate of the masses" and that you should instead believe in science and progress. Your parents might have taught you a prayer or two in private but will probably not even have baptised you, out of fear for their and your future career.

In this environment you'll most likely develop into an atheist. Sure, at some point, you might realize what has happened, but by then it is most likely too late. Just knowing what prevented you from becoming religious will not suddenly turn you into a believer.

Of course this is a simplification and the reality is a bit more complex. For example there has always been a small core of religious people and a big difference in importance of churches between cities and countryside, but the general idea is clear.