Gods source their divine power from faith and worship. Their powers are just basic arcane magic in another form, powered by the prayers and praise of their subjects. The more popular a god is, the more powerful they are.
Evil gods, though they tend to have less followers, make up for the lack of worshippers by having a more intense form of worship – sacrifice. For example, a follower of Gruumsh creates more power for their deity by murdering someone than an entire church service to Erathis.