Gods of Alara live closely with mortals and visit the planet frequently. As each god has a proven existence and great power, atheism does not exist outside of those truly detached from reality. While there have been minor disputes between differing congregations over time, most churches respect each-others existence and there is little discrimination over religion. Nearly every country is officially pledged to a specific god, however, all citizens have freedom of religion and may worship whichever god they wish.
Mortals' tolerance of other religions is a reflection of the gods' attitude towards each other. The gods, at least as far as the mortals can see, have always worked harmoniously together. The closest thing resembling conflict between the gods (and, by extension, their churches) was during The Divine Era, where certain gods lent their celestial beings to different factions of the warring countries (see:
The Celestial Stalemate). While churches coexist peacefully and none try to force their doctrine on another, conversion past young adulthood is seen as poor-mannered and, in some churches, disrespectful to the gods. Typically, a family will pledge themselves to one deity (much like countries do) and will try to maintain with that deity throughout future generations. It is normal for young adults (around 18-20 for centennial races and 30-40 for Tricentennial) to take time for themselves and explore all religions so they may make a personal choice. Past this period, however, conversion is highly frowned upon.
While there is no religious discrimination pertaining to major god worship,
minor deity worship remains a controversial subject. Until The Glory Era, many countries outlawed the practice, and many still have a social stigma against it. Those that chose to follow minor deities mostly do so to gain specific magical powers. While most of those that follow minor deities see themselves as practicing a religion, many outsiders see them as cults.
The debate whether minor deity worship is cult-like or not is subjective for the most part, but all agree that worship of demon lords is unquestionably hostile. It is outlawed in all countries, and those found worshiping demon lords are normally subject to imprisonment and, in some countries, execution. Studying demonology is also forbidden for most, as demon lords grow more powerful the more people know about them. Only a select few are allowed to study them closely. These select few, referred to as demonologists, keep their identities hidden and are isolated from society. All that is publicly known about them is that they are always elven, they are chosen by a god personally, and they only commune with said god for the rest of their lives. The lords work through their spawn, who wreak havoc in accordance with their domain. There have been sporadic reports of the demon lords themselves showing up, but it is nearly always followed by direct divine intervention. There have been no known instances of the lords themselves showing up since the beginning of The Glory Era.