These words are quoted widely on the web as one of the Buddha's most famous quotes. However it is thought to have come from one of his sermons which said :
“Kalamas, when you yourselves know: ‘These things are good; these things should not be blamed ; these things are praised by wise people ; done and observed, and they lead to benefit and happiness,’ do this and live within them."
What the Buddha is concerned about here is that we should figure things out for ourselves and that is why Buddhist undertake meditation which leads to spiritual contemplation rather than just give themselves up to authority. However Buddhists do not reject the authority of their spiritual leaders.
What is finally decided by the Buddhist adherent should be measured against the collective wisdom of the Sangha and the message passed down from the Buddha over 2500 years of Buddhist history.
“Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense.” Buddha
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