Edie's telling Barry that you can't be a saint without engaging with the world. You have to go out there, and do stuff.
JOHNNY: What gives with our boy tonight, Charley? He ain't himself.
CHARLEY: The Joey Doyle thing. You know how he is. Things like that — he exaggerates them.
Terry isn't actually exaggerating it. He's got a conscience and is reacting the way a normal person should react to murder—with disgust and horror. Charley and Johnny are the ones having the messed-up reaction.
TERRY: I thought they'd talk to him. Try to get him to dummy up.
CHARLEY: Maybe he gave them an argument.
TERRY: I figured the worst they'd do is work him over a little.
Charley's already trying to explain or justify the murder—he knows who butters his bread (Johnny). But Terry can't get away from his conscience, and is already blaming himself for his role in the murder.
BARRY: And every time the Mob puts the pressure on a good man, tries to stop him from doing his duty as a citizen, it's a crucifixion. And anybody who sits around and lets it happen, keeps silent about something he knows that happened, shares the guilt of it just as much as the Roman soldier who pierced the flesh of our Lord to see if he was dead...
Barry says that being indifferent isn't enough. You can't refuse taking a stand. If you don't stand up for the innocent, for the people who are being crucified, you're effectively siding with evil.
TERRY: Conscience…that stuff can drive you nuts!
EDIE: I never met anyone like you. There's not a spark of sentiment or romance or human kindness in your whole body.
TERRY: What good does it do you but get you in trouble?
Terry's acting like he doesn't believe in having a conscience and that it'll just lead you into trouble—and it does lead him into trouble. But it's trouble that's worth taking.
EDIE: I want you to stay away from me.
TERRY: Edie, you love me... I want you to say it to me.
EDIE: I didn't say I didn't love you. I said, "Stay away from me."
Edie's love for Terry ultimately outweighs the blame she's putting on him. Terry didn't know they were going to kill Joey, so he can't be held fully responsible for his role in Joey's death—and, besides, he's doing everything he can to make up for it. Still, it's pretty remarkable that Edie's willing to forgive him.
JIMMY: A pigeon for a pigeon!
Jimmy's acting like there's something terrible with what Terry did, testifying against Johnny. He's calling him a stool pigeon. But this is a totally empty morality, and Jimmy is acting like a total sociopath—slaughtering a bunch of birds and throwing one of their dead bodies at Terry just to make a (dumb) point.