Meritocracy actually is about how students or private employees are chosen, since the word is typically used to apply to the entire society of the USA, not just its government.

So yeah, if all schools were suddenly uber-Catholic and dissuaded non-Catholics for example, then that would mean the society has become less meritocratic. Or if companies had racial preferences in hiring instead of hiring based on merit and achievement, and this was widespread, then the US could not be said to be a meritocracy.

This is not a legal or governmental discussion, this is about sociology, anthropology, and culture.