The way I see it, the players need the gods, and the gods need the players, so ideally there'd be enough checks and balances to make sure everything runs smoothly. Of course this is providing the gods don't start cheating themselves, but if they do then the admin of course can can them.
The way I visualize it, the gods wouldn't punish the cheaters so much as try to dissuade them from their course. At this point in the design, we're unwilling to give gods the ability to straight out kill mortals because of their obviously godlike powers. So the gods basically report what they see to the admin, and try to make things uncomfortable enough for the cheaters that they either stop cheating or stop playing, and if all else fails the admin either punishes the cheaters, or gives the gods permission to get rid of them. So most of the time the punishing of cheaters will look like an IC event (King Fred is under a curse, blahblah) and give real incentive to others to not cheat.
Of course none of this may work, but like I said the thing isn't nearly coded enough to be usable yet anyway, and we may end up totally changing it around by then. But our aim is to keep a buncha jerks from cheating and ruling the mud, and this is all we could think of to fix that problem. If you have other ideas that might actually WORK, feel free to share them. (I don't mean to be cynical here but in my experience only the most blatant cheaters ever get punished, and I aim to change that if I can.)
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