I think that this is one of the best, most inspirational threads created on ENWORLD in the last few years. It simply opens so many doors in my imagination, bypassing many of the things which have led me to DM burnout and to a writer's block.
I'm SO going to use this for my
Wounded Gaia setting; I was already thinking about something in this direction, but this thread gave me so much inspiration. Sure, Wounded Gaia has two major gods with world-wide influence, Vesna/Marzanna (the Mother Goddess/Gaia) and Koschei (the Clockwork God), but these are distant, inhuman gods. So most people worship local "gods" (or spirits? or fey? I still have to decide on the term).
The beauty of this thread's idea is that religion becomes a matter of PC-NPC interactions, with a lot of "gods" of varying power adding color and flavor to the setting. These could range from very, very minor gods such as the household
Domovoi to mighty forest-gods (treants?). I might even move Aboleths and Dragons (and a lot of other monsters) from being "normal" physical creatures to being "gods".
Just think of making all, or most, Aberrations into weird "gods". The Spirit World has its own rules, so you don't have to think about the ecology of Aboleths or Beholders - they are weird "gods" inhabiting weird places. Now, if benefit could be gained by worshiping them, this gives us a great hook for all these strange, Cthulhu-eque cults...
In 4E terms, Rituals might be possible to perform only by "gods"/spirits, but anyone - including non-heroic NPCs - has the potential of convincing one to perform these rituals with the right reasoning, flattery, service and/or bribe. Of course, a layman might have a significant chance of offending the "god" in the process, leading to dire consequences... Or of being tricked into doing nefarious things for a particularly nasty "god"....