The idea that gods exist only to the extent that we believe in them is kind of a fantasy cliché, but the reason it is overused is that it is a good idea, and very effective when used right. One of the authors who does use it right is Terry Pratchett, who applies this theme to many of the Discworld novels, and particularly Small Gods and Hogfather.

Hogfather is the best of these two, and one of the best of the series. The Discworld Santa Claus has been killed, and suddenly new gods are appearing rapidly, (the god of hangovers, the god of indigestion, the god that steals your socks, etc.), to fill up the belief vacuum. Death and Death’s granddaughter are on the case, and it all builds up beautifully to one of the best exchanges of the series.

Hogfather doesn’t rely much on backstory, so it’s a good introduction if you haven’t read any Discworld novels. There was also a fine mini series made from it in 2006, which I recommend if you’re unsure about tackling the books. (And .. huh, seems they’ve now filmed The Colour of Magic as well. Will check it out.)