What was in Nietzsche's mind when he pronounced that “God is Dead,” (in The Gay Science and Thus Spoke Zarathustra). According to Hannah Arendt, Nietzsche is talking about the end of something other than the traditional God. Here’s an excerpt from Arendt’s The Life of The Mind:
"No one knew this better than Nietzsche, who, with his poetic and metaphoric description of the assassination of God, has caused so much confusion in these matters. In a significant passage in The Twilight of Idols, he clarifies what the word "God" meant in the earlier story. It was merely a symbol for the suprasensory realm as understood by metaphysics; he now uses, instead of "God," the expression "true world" and says: "We have abolished the true world. What has remained? The apparent one perhaps? Oh no! With the true world we have also abolished the apparent one"
She notes that the concept of God’s death is not Nietzsche’s unique position because Hegel, in his Phenomenology of Spirit, has said that the "sentiment underlying religion in the modern age [is] the sentiment: God is dead.” What Hegel (and Nietzsche) meant by the “God is dead” statement is that theology, philosophy and metaphysics have reached an end.