Jesusboy, it's ok. Well, I think it is anyway. Basically, this is what is happening, the world that the anime takes place in is "Shamballa" a mythical kingdom that exists in Buddhist myth. Shamballa is treated as a sort of alternate dimension, and in this dimension the souls of the dead can be harnessed to power unnatural transmutations, Alchemy. Fortunately, this setting seems to be contemporaneous with the World Wars. Thus, lots of souls.
So not pagan. Just not Christian. Though the series does suggest a christianity-like (ok, not just -like) once existed in Shamballa, and it plays a marginally important role later on.