It's not that everything is god so much as everything is a god; it's not pantheism, or at least it's not pantheistic in its premise, it's that every natural phenomenon is taken to be a conscious agent in its own right, a "god" so far as the term is applicable. And again, it's not that this a decision made empirically, that people started going "oh, that's a god, and that's a god, and that's a god", rather, it's the absence of a materialistic distinction between the animate and inanimate, it's entering into the world with the assumption that, if something appears to be motivated or propelled in some way, then it is a concious agent like you or me. Everything is a god, but in an equal sense there are no gods, because "god", "spirit", "sorcerer", all these terms begin to collapse into each other, because they all describe beings of power, distinguished not so much in any essential way as how they appear in the world. By the time that anything even approximate to the modern concept of godhood emerges, these belief-systems have been active for thousands of years.