Although I am best described as an athiest that does not mean I don't think Gods exist at all. They are real in the minds of those who believe regardless of my own opinion on the matter. This means, Allah, Jesus, Yaweh, Satan and a whole cast of non-corporeal beings are still part of my reality in the same sense as other concepts such as communism or capitalism are. In other words Gods are ideas but unlike communism or capitalism they are ideas which claim to be conscious.
The Gods make various incredible claims a few examples of which include; the creation of the universe, the possesion of magick powers, the ability to grant wishes if you worship them and that they are the only God around. From my point of view all of these asserions sound like blatant lies, particularly when we look at both the lack of proof coupled with the huge ammount of evidence to the contrary. The world of physical science refutes the creation myths, magick powers and ability to grant wishes. The historical fact that Gods are not new and have existed in many forms throughout the ages refutes monothiesm.
However this declaration to be in some sense "alive" is fascinating and not so easy to reject. A life form which is full of lies is still a life form. Infact the ability to lie has always been seen as an indicator of a certain level of "consciousness" and it is for this reason that biologists continue to investigate it:
When in a tight spot, animals "lie" to their own kind to get what they want, a University of Rochester biologist has found. [...] within a single species, it is possible for some members to deceive others. [...]
By proving that the weaker are able to deceive the stronger to survive, [...]
Biologists have long recognized that deception is commonplace in communication between different species. But most believed bluffing among animals of a single species should be rare or impossible.
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Notice in this article that "deception is commonplace in communication between different species". Look back into the history of our interaction with Gods and it was always the case that people suspected they were being lied to by these non-human entities. Abraham arguing with God in The Bible is just one example of this ancient tradition. Indeed even the act of arguing is important because it reminds us the earliest humans recognised that, like any life form, a God can change its mind if you reason with it.
Before this article gets too esoteric it's worth pointing out that if Gods are 'alive' they only interact with my reality through the actions of their believers. The laws of physics might limit Gods in some ways but they do not prohibit those who take action in their name. In fact, that's the only physical evidence we have of the existence of these "life forms". Despite not having physical form, the Gods have actual power in the real world. They've, amongst other things, built churches, waged wars, elected monarchs, persecuted gays and set up charities.
There is a debate in society at the moment about whether or not religion is a public or private matter. Baroness Warsi, herself a believer, is warning that British society is under threat from what she calls the rising tide of “militant secularisation” reminiscent of “totalitarian regimes”. There's been the recent "controversey" over Bideford council's dropping of prayers from its formal agenda after a high court ruling and Richard Dawkins's MORI poll which reveals even UK Christians don't want religion to 'influence public life'.
Government is always better if it is "of the people, by the people". A God is not a person, even if it is "alive" in some sense. Personally speaking I think all our formal legal relationships with Gods, which grant them "real world" power, have to come to an end. Extracting ourselves from their control, in a legal sense, will take a while because the roots of it all go so deep. The tax breaks, prayers, public buildings and monarchs that we grant in their name are unlikely to vanish overnight. However once it's done the Gods will still exist, in some sense, and we will be closer to being a human democracy.