By the time of Jesus, Judea was occupied by the Romans, who were polytheists. Their governors, soldiers, and administrators were all polytheists. There were also local polytheistic religions (such as the Canaanite woman mentioned in Matthew 15). The Hebrew Bible does say that pagans shouldn't be allowed to live in the land of Israel. It's unclear, historically, whether that was ever enforced. But definitely under Roman occupation, the local community didn't have any ability to enforce that rule even if they had done so before.