The gods didn't die, so much as ascend.
When it became clear that the 7 gods were not going to win the original war with the Lord of Chaos, they gave up their physical bodies and left the material world, drawing the Lord of Chaos with them (who then became trapped between the physical plane and the spirit plane, and the place called hell grew around him). Eventually all the demons left in Rivellon were killed, with their spirits going to hell. Occasionally some manage to get back to the physical plane, so the seven gods would choose mortals as their champions, and mark them with a sign. If they proved worthy, a Marked one would undergo a ritual to receive the blessing of the gods, making them a Divine One.
