To classes of spirit helped create Mundus - some became Earth Bones because they gave so very much of themselves that nothing living remained at all. They literally became the world. Others gave up so much of their physical form and spiritual power that they cannot bodily walk on the world any more, and many require worship and shrines - they can only interact through their priests and during special occasions. These are the Aedra, called Divines by some but not by all.
Another theory, for the OP's benefit, is that fully all of the Aedra died and became Earth Bones, but the
memory of those beings were empowered to become Gods by the belief of mortals, because in Mundus, belief can shape reality.
Mehrunes Dagon was probably Magnus.
I thought I'd gotten most agreed-upon concepts of the lore down by now, but I have to say I somehow haven't heard this one. Care to enlighten me a little, Hairdo?
@Athell -- It is in fact possible that Akatosh would conspire against himself. Though they are the same being, they are different aspects. Michael Kirkbride, who was once a writer for Bethesda, and is responsible for a great deal of the lore as we see it today, once said:
"Don't forget that gods can be shaped by the mythopoeic forces of the mantlers-- so Tosh Raka could be an Akaviri avatar of Akatosh with a grudge against his mirror-brother in Cyrodiil.
Just like Akatosh-as-we-usually-know-him could time-scheme against his mirror-brother of the Nords, Alduin, to keep the present kalpa-- perhaps his favorite-- from being eaten.
Notice all the coulds."
Hope that goes some way to answer your question.