The way I see it, consciousness pervades the universe, but is more dense and focused in certain locales. (Compare matter, which is also unevenly distributed.) We are foci (or perhaps nexi) of consciousness, and so are deities. We arise out of the underlying consciousness of the universe, which has been described in a number of spiritual traditions: the Neoplatonic "one god", the Tao in Chinese thought, the Pleroma in Gnostic thought, and Wyrd in Northern thought, are related concepts (though not interchangeable). I see it as an omnipresent impersonal underlying energy. But precisely because it is omnipresent, it cannot be locally focussed, and its awareness (if it has one) is entirely other, and incomprehensible.
Neoplatonism was a late development in classical paganism, probably in response to Christian monotheism. Most of the ancient classical mystery traditions were either henotheist or polytheist (though the one that has come down to us via Lucius Apuleius was syncretist: www.fordham.edu/halsall/ancient/lucius-assa.html) It is interesting to speculate why there was a shift in the focus of religion towards the underlying energy instead of the beings who arise from it (apart from the obvious one of people being forcibly converted to Christianity). And now there is a shift back to polytheism proper (i.e. believing in many deities as individuals, rather than regarding them as aspects of a greater unity). Perhaps this is because people are having more in-depth encounters with the gods.
Consciousness (both incarnate and discarnate) arises out of the underlying energy, and can dissolve back into it. But while it is manifested, either in its own realm or ours, it is distinct and individual (I am talking about both human and divine consciousness here). Can gods die? I don't know. Certainly the gods of Valhalla are said to need Iduna's golden apples in order to maintain their immortality. I quite like Terry Pratchett's theory of how gods occur, expressed in the book Small Gods. But I think gods are entities who have continued to exist for thousands of years. However, the way we perceive the gods may well not be what they actually look like, just the "clothing" we put on them when we see them.
Discussion of consciousness dissolving back into the underlying energy reminds me of the question of what happens when we die (an appropriate post-Samhain subject) - there are many possible theories here:
- death is the final dissolution of consciousness, that's it;
- everyone dissolves back into the soul soup;
- everyone goes to an afterlife;
- everyone is reincarnated as an individual;
- only initiates are reincarnated as individuals, everyone else goes back into the soul soup (this theory is found among some South American 'shamans');
- the impersonal soul or essence is reincarnated, the personal spirit gets recycled into the soul soup;
- the impersonal soul or essence is reincarnated, the personal spirit goes to an afterlife to be with the ancestors