In 1 Corinthians 8:5, what do the "many gods and many lords" refer to? In 1 Corinthians 8:5–6, we read:


  5 For although there may be so-called gods in heaven or on earth—as indeed there are many “gods” and many “lords”— 6 yet for us there is one God (ESV)


I'm having a hard time with in one breath we see "one God" and then the former "many gods and many lords."  What is an overview of how should we understand "many gods and many lords" here?
There are actually two similar ways that this passage is interpreted:


That the "gods" and "lords" are the completely imaginary gods of the heathen
That the "gods" and "lords" are supernatural beings that do exist, but are not divine


Many commentators don't attempt to draw a distinction between these two, like George Leo Haydock (a Roman Catholic), who writes that these "gods" and "lords" are simply "reputed for such among the heathens."

Adam Clarke, a Methodist, prefers the first view.  He writes:


  There are many images that are supposed to be representations of divinities: but these divinities are nothing, the figments of mere fancy; and these images have no corresponding realities.


On the other hand, Charles Hodge, a Reformed Protestant, prefers the second view, in light of passages like 1 Corinthians 10:20:


  I imply that what pagans sacrifice they offer to demons and not to God. I do not want you to be participants with demons. (ESV)


Either way, however, we can say with Hodge that Paul's purpose here is to say that 


the heathen gods, as the heathen understand them, do not exist, and 
the supernatural beings (angels and demons) that do exist and are called "gods" are not divine at all: they are creatures, created by the one true God.