"God is dead. God remains dead. And we have killed him. How shall we, murderers of all murderers, console ourselves? That which was the holiest and mightiest of all that the world has yet possessed has bled to death under our knives. Who will wipe this blood off us? With what water could we purify ourselves? What festivals of atonement, what sacred games shall we need to invent? Is not the greatness of this deed too great for us? Must we not ourselves become gods simply to be worthy of it?"
— Nietzsche, The Gay Science, Section 125, tr. Walter Kaufmann
"God is dead" is not meant literally, as in "God is now physically dead"; rather, it is Nietzsche’s way of saying that the idea of God is no longer capable of acting as a source of any moral code or teleology. Nietzsche recognises the crisis which the death of God represents for existing moral considerations, because "When one gives up the Christian faith, one pulls the right to Christian morality out from under one’s feet. This morality is by no means self-evident…. By breaking one main concept out of [Christianity], the faith in God, one breaks the whole: nothing necessary remains in one’s hands." This is why in "The Madman", the madman addresses not believers, but atheists — the problem is to retain any system of values in the absence of a divine order.
The death of God is a way of saying that humans are no longer able to believe in any such cosmic order since they themselves no longer recognize it. The death of God will lead, Nietzsche says, not only to the rejection of a belief of cosmic or physical order but also to a rejection of absolute values themselves — to the rejection of belief in an objective and universal moral law, binding upon all individuals. In this manner, it leads to nihilism, and it is what Nietzsche worked to find a solution for by re-evaluating the foundations of human values. This meant, to Nietzsche, looking for foundations that went deeper than the Christian values most people refuse to look beyond.
Nietzsche believed that the majority of men did not recognize (or refused to acknowledge) this death out of the deepest-seated fear or angst. Therefore, when the death did begin to become widely acknowledged, people would despair and nihilism would become rampant, as well as the relativistic belief that human will is a law unto itself—anything goes and all is permitted. This is partly why Nietzsche saw Christianity as nihilistic. To Nietzsche, nihilism is the consequence of any idealistic philosophical system, because all idealisms suffer from the same weakness as Christian morality—that there is no "foundation" to build on. He therefore describes himself as "a ‘subterranean man’ at work, one who tunnels and mines and undermines."
–found in Wikepedia–