There's a little gem of a commentary on Luke's gospel, by G B Caird, long out-of-print, but can easily be picked up second-hand.
I think he gets to the heart of Luke 2:1-7 succinctly in a way that many more detailed commentaries don't.
“The point in the story that especially captured Luke’s fancy was not just that Jesus was born in Bethlehem according to the old prediction, but that this promise of God came true because of an enactment of the Roman government. God was working his purpose out not only through the hesitancy of Zechariah, the exuberance of Elizabeth, and the quiet faith of Mary; Caesar Augustus too, like Cyrus in earlier days (Isaiah 45:1), had become the unwitting coadjutor of a salvation which would one day encompass his whole empire.” (Page 60)
It's hard to know exactly for whom Luke wrote his gospel. There's a major theme in Acts (Luke's second volume) in showing that the Christian gospel is no threat to the Roman empire. This works evangelistically, because Rome dominated the political horizon of its day. The Roman citizen derived their security and identity from their citizenship; the non-citizen regarded Rome as the ultimate authority to be feared. There's another theme in showing that the gospel will spread, and civil persecution will not stop it.
With those big themes in play, it's then easy to see what Luke 2:1-7 is saying to its first readers.
To the non-Christian reading Luke-Acts, Luke 2:1-7 is saying that Rome may be powerful, but actually Roman decrees brought into the world the child through whom God's true purposes would be achieved. So as overawing as Rome was, God's purposes through the child born at Bethlehem eclipse them.
To the Christian reading Luke-Acts, Luke 2:1-7 shows that the mighty Roman emperors are actually the means by which the true sovereign achieves his purposes. Therefore when Rome opposes the Christian church, the long-term view is actually that they will be the means through which God achieves the very purposes they seek to stop.
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