Unil 1881 the Christian church on the Island held the monopoly in dealing with the dead - ie burying the bodies and the distribution of the deceased goods(wills + decrees) - those who dissented from the CoE buried their dead in older but now disused sanctified places (eg Catholics in grounds of Peel Castle or on St Michael's Island but these are seldom recorded in Parish Burial regs) - the Methodists (about 50% of Island in mid 1800's) were happy with burial in the parish churchyards but wished to have the burial service with more congrgational participation (eg singing of hymns) - generally the vicars turned a blind eye (or deaf ear) - the only Methodist burial ground alongside Peel Chapel was I think more of a protest against the gross overcrowding of bodies in the small yard in Peel than any disagreement with the established church.
Post 1881 Douglas Borough created a new Cemetery and also the parish church cems became supported by local taxes as Local goverment became responsible for more activities.