So where this kind of breaks for me is with the Dirt Farmer. Dirt Farmers can be just as devout. If the Dirt Farmer's husband dies in an orc attack, does the god intervene? What about for all the Dirt Farmers who are just as devout? What threshold of "devout?"
Well, I've had 14 PC's so far in the campaign and only one would qualify IMO as 'devout'. One has the 'divine blood' trait, so it doesn't really matter that much if she's devout or not - she's family.
Supposing that normally only the devout can get divine intervention and that the devout threshold is 1 in 10, and that of those only 1 in 36 normally get their prayers answered, if a village is attacked by orcs, we're looking at maybe 1 miraculous intervention in the whole village. Now in fact, I think the PC's tend to be less devout than the population as a whole, but still we aren't talking about a lot of noticible effects (more on that later).
Do the Dirt Farmers know about this and make sure to be especially devout so as to secure for themselves and their loved ones a ripe old age?
In theory, well, yes. As I've said before, in general, an inhabitant of my world if transported to medieval Europe would be shocked by how little of an impact religion had on peoples daily lives.
Is a good chunk of the population rising from the dead after an orc attack just because the people were especially devout?
No. So assuming the average person is a 1st or 2nd level commoner, the expected degree of divine intervention (per my rules) is along the lines of a 1st level spell - a Santuary spell that hides them from orc, or an Obscuring Mist that suddenly arises and allows them to flee, or the Orc being dazed for a few moments allowing them to run away, or perhaps a cure light wounds that heals their dying friend enough that they can get to their feet and stumble away. So in the midst of the Orc attack, perhaps a half dozen tiny magical effects occur in ways that to the orcs don't even seem necessarily related to the supernatural.
I think it worth noting that of the three cases of divine intervention so far in the campaign, one of them was insufficient to change the outcome and rescue the PC from the trouble he'd gotten into. It is purely coincidence however that case was the one time an evil deity interfered on behalf of the PC's (one of the PC's had offered him a blood sacrifice of their own blood within his sacred 'grove', and then rolled box cars). Because of The Compact, the deities are careful not to just blow power on people without expectation of reward.
Honestly though, the Orcs probably have more trouble with things like Ancestral Spirits, Deluctas, Brownies, lesser animal spirits in the form of dogs or cats, and other 'small gods' that are moved to protect their village (likewise, if the villagers where to attack the orcs) than they would with the major dieties. But in no case is this likely to be something as dramatic as 'raise dead'.
But you want to talk about having no plot protection, consider my world where the orc tribe and the village of dirt farmers - all of which are NPCs - are living in their own ways as rich of lives as the PCs and have in many ways the same basic relationship to it. Presumably if the perspective of the players suddenly shifted to where they were the dirt farming inhabitants of the village attacked by the orc war party, their fundamental experience of play wouldnt' change. The world would still be haunted by fairies and spirits, filled with terrors and wonders, and meddled with by the gods of good and evil.
What about in a theocracy where devotion is mandated and enforced by law?
What about it?
I think that there is an implicit assumption in your question that the gods of D&D are basically like the Christian God and only care for and reward sincere worship. Again, that's a religious assumption informing your understanding of your campaign world. Zeus does not particularly care whether he is sincerely worshiped so long as the sweet smell of the fat of bulls rises to heaven. Zeus certainly does not want or expect a mutually loving relationship with his worshipers, unless those are particularly attractive females (probably with some divine blood already) and in which case he's only interested in a short fling and not particularly whether she enjoys it. Zeus's followers don't really expect Zeus to love them - they simply accept he has the right to demand worship and the power to punish if it is withheld. In a D&D world a rational argument can be made that mandating and enforcing devotion is in the best interests of the people, and that - given the wrathful and vengeful nature of the gods (see Greek myth) - a society that oppresses the less devout is just engaging in rational self-defence. You don't want to get you whole town sacked and everyone murdered just because some fool rake offends the Gods and steals a woman.
Miracles aren't miracles if they don't violate what you'd expect to happen.
*sigh*
I'm reminded of when Galadriel tried to get Sam Gamgee to explain to her what he meant by 'magic'. What do you mean by 'miracle', here? Isn't the whole point of pious faith that you do expect miracles to happen? If you don't really expect them to happen, perhaps they arent' miracles - they are coincidences.
No one should have an expectation of having their dead wife rise up again, no matter how devout.
In a world where as a practical matter, raise dead is no really big deal, I don't see how that follows.
But what about what makes for a better story? "Plot immunity" here is just not the most interesting result. A death of someone you love is a much more interesting plot point than near-death-because-deus-ex-machina-of-someone-you-love.
Really, what plot immunity? There is still plenty of oppurtunity to die in a story with active gods. People do it greek myth all the time.
And why does deus ex machina always make for a less interesting story? There is plenty of 'author ex machina' in well loved stories even when no 'deus' is involved. Is The Princess Bride less interesting because Wesley doesn't die? Is the Iliad less interesting because the gods are continually feuding with one another? What about the crazy coincidences in Dumas, Hugo, and so forth? How many Rom coms and comedies of manners and mistaken identies depend on crazy author engineered coincidences? What about Gene Wolfe? Tolkien? Harry Potter?
As a practical matter at an RPG table, I'm not sure I'm convinced the death of an NPC or PC is inherently more interesting and better of a story than one with divine intervention. For one thing, there is seldom time to build up and repair a story to the point that it becomes as interesting as it was when the relationship existed.
But I'm not even convinced your assertion holds true for literature generally.