Perhaps the most misconstrued statement of Nietzsche's philosophy is the idea that "God is dead." Nietzsche first uses this phrase in his work The Gay Science, though he uses it most famously in Thus Spoke Zarathustra. Without context, such a phrase signals the worst fears of atheism and moral anarchy to a religious person, yet modern theology has done much to reconstruct and recontextualize this theory in light of modern society.
Nietzsche does not mean that God has experienced a physical death (since God is not a physical being). Instead, he hypothesizes that if a Christian society starts to doubt the existence of a spiritual being, the moral fabric of such a society will be pulled apart. Nietzsche is not trying to kill God himself; society had already done that. He is trying to posit a way for humanity to reconstruct itself in the vacuum left by the destruction of Christian morality.
In the late 20th century, theologians such as Gabriel Vahanian, Paul van Buren, William Hamilton and Thomas J. J. Altizer, and the Jewish rabbi Richard Rubenstein began to expound upon the idea that God is dead.
The task of many of these theologians was to imagine a post-modern, post-Christian society in which values could be reestablished. They acknowledged that - for humanity - God truly was dead and, just as Nietzsche predicted, a post-Christendom nihilism faced society. In the wake of the Holocaust this nihilism spread through Europe. Reconstructing a society that could function morally in such a state was the goal of these God-is-dead theologians. For most of them, the question of whether or not God actually existed anymore was irrelevant.
21st century religion is proving to be a problem for post-God theology, however, because instead of increased nihilism, much of the world has experienced a revitalization of religion. Areas such as the Middle East and South America have experienced tremendous growth for Islam and Christianity, respectively. North America continues to be a bastion of religion, failing to undergo the secularization that Europe experienced in the late 20th century. Even in secular Europe, new sparks of religion are starting to burn and secular theorists are revising their ideas in light of such gains by religion.
What the 21st century will hold for God-is-dead theology is unclear, but it is difficult to refute that the moral base of Christendom has eroded. Works such as Thus Spoke Zarathustra offer a starting place for re-imagining a post-Christian world.