What does Luke 17:20 mean?
"Jesus' Travelogue to Jerusalem" (Luke 9:51—19:27) is a group of stories that identify who Jesus is and teach the disciples about the kingdom of God. It's not certain that Jesus' interaction with the Pharisees (Luke 17:20–21) directly follows His healing of the ten lepers (Luke 17:11–19) or if Luke, through the guidance of the Holy Spirit, placed it here for effect. His writing, in this section, is grouped more by topic than by time order.The effect is great, however. Early in the chapter, Jesus told the disciples that they only needed a tiny bit of faith to accomplish great works (Luke 17:5–6). Just prior to this interaction, Jesus told ten lepers to show themselves to the priest. They responded immediately and found their leprosy healed as they went. Now, the Pharisees are incapable of seeing that the kingdom of God has come.
Their narrow-mindedness continues in a startling fashion. Within the political spectrum of Jewish sects, the Pharisees are strong nationalists. They aren't as extreme as the Zealots, but unlike the Sadducees they want the Romans gone and Israel returned to the Jews. Their expected version of Messiah is a strong military leader. They expect another King David, who will raise an army and drive out the Romans. They just don't see that in Jesus.
They don't understand that as the Messiah, Jesus will fulfill the Old Testament prophecies gradually. In this, His first coming, "He will not cry aloud or lift up his voice, or make it heard in the street; a bruised reed he will not break, and a faintly burning wick he will not quench" (Isaiah 42:2–3). He will give sight to the blind, hearing to the deaf, wholeness to the lame, and speech to the mute (Isaiah 35:5–6). He will also heal the lepers, making them physically whole and ceremonially pure so they can worship God in the temple.
And, still, the Pharisees don't see. They don't "observe" that Jesus' healing ministry is empowered by the Holy Spirit and designed to affirm His words come from God (John 5:36; 10:38). They don't see that the Son of God has invaded the world of sin and "the kingdom of God is in [their] midst" (Luke 17:21).