The Gay Science: Book III – Aphorism 125 (link)
When the mad man rushes into the market place with a lantern and declares that he seeks God, the men around him mock him and indicate that they don’t believe in God. The mad man then declares that God was killed by all of them.
It is important to point out that stating “God is dead” is a tacit admission that God once existed. What Nietzche is indicating is that we created God to fill up our spiritual voids at one point in time, but we no longer need God and hence we have killed him. It should be highlighted that Nietzche is implying that God is a human conception whose functionality has run out. He goes onto highlight that this lack of reliance on God would be (Friedrich Nietzche 1844 – 1900) chaotic.
The men around him who don’t believe in God eventually greet his outburst with silence. One must understand that Nietzche is trying to indicate that we might have stopped believing in God (or given up our faith in a religion), but we have only replaced this faith in God, with faith in other forms of “truths.” He is indicating that the new systems of scientific positivism, democracy, feminism, utilitarianism and so on, have simply taken the place of the truths that were once represented by God. This is the reason why the men around him greet him with him laughter, followed by an astonished silence.
The mad man says that the individuals who carried out this deed (of killing God) need to become God’s themselves. What he means is that each individual should question the idea of “truth” itself and realize that they can and ideally should arrive at their own sense of right and wrong. Nietzche’s belief in perspectivism is very evident as he doesn’t believe in any forms of absolutes. The men around the mad man obviously don’t understand this idea.
Upon realizing that these men don’t understand what he’s talking about, the mad man says that he has come too early and walks away. At this point, note that Nietzche could be calling the mad man, “mad”, simply because he represents this breakdown in the belief of some form of absolute truth or the other. Nietzche could have also be referring to himself. Nietzche thinks we should question every truth and embrace nature and life (represented by the Greek God Dionysius).
The madman also notes that churches will be tombs and catacombs as God would be dead, but our reliance on some form of truth persists as the remnants of the previous truths we believed in (God) seem to indicate.