I thought this would be a nice change on discussion on Trumps or ''SJW'' stuff.
Suffice to say, the classical interpretation ''they thought he was a god'', while not exactly false, is apparently an oversimplfiication.
1)The nahualt term used for ''god'', teotl, while used to describe their gods, probably had a vastly different sense that greeco-romans, let alone judeo-christian, god(s). Rather tellingly, Quetzalcoalt was both a god and the ruler of the city of Tollan/Tula (see later). It was also the name of quite numerous rulers, pre-Aztec ones. ''Teotl'' was also the name given to dudes climbing the stairs of sacrificial pyramids. Otherwise said, ''teotl'' was used both to describe gods and, for the lack of a better term, Humans replaying (or rather, cosplaying....I use that term to stress out the importance of costumes) the actions of Gods. It might even mean something like ''force of nature'', AKA executing the will of the Gods/supranatural forces, not a God itself.
2)The degree of cyclical thought in Aztec world conception is hard to grasp for people used to a linear timeline, but appears to have been quite central for the locals. To take a degree of comparison, let's say that the average player of JRPGs or RPGs known quite well the trope about the old and mysterious empire that died aeons ago and was incredibly powerful, whose ruins still dot the landscape (presumably filled with various eddritch abominations). The Aztecs took this for granted altough for fairly obvious political reasons
They saw themselves as the heirs of the previous grand civilization of Meso-America, dubbed by them as ''Toltecs''.
(There is obviously a culture called ''Toltec'' that existed in Meso-America, but ''Toltec'' amounts to ''Grand Ancients'' or ''Forerunners'' : it means roughly ''the builders'' or ''the master artisans''. To confuse further, ''toltec'' was used in Nahualt to describe actual living artisans and scholars, AKA ''civilized people''. It was used in opposition to ''chichimec'', whose sense is close to the Roman-Greek ''Barbarian'', meaning ''cityless hunter-gatherer'', which the Aztecs themselves used to describe their warriors)
Suffice to say, the capital of the Toltecs was called ''Tollan'' (Tollan, ''amongst the reeds'' a metaphor for ''where humans are as thick as reeds'', AKA a metropolis, usually in the sense of ''THE metropolis'', like ''Urbs'' came to meant Rome) and ''Tollan'' was a title given quite openly to three distinct cities
-Teotihuacan (lit : the birth place of the Gods), a sprawling complex of ruins, thought nowadays to have fallen around 700 AD
-Tula (the capital of the Toltecs), that have fallen around 1150 AD
-Tenochtitlan (the capital of the Aztecs)
Teotihuacan and Tula (whose locations were perfectly known, they were not hidden in a volcano or anything) were for the denizens of Meso-American something like Rome for medieval travelers (or any urban ruins in a videogame) : the proof that huge and fearsome empires had existed and had now vanished.
There are two ways to interpret this, in no way contradictory.
A)The Aztecs used the heritage of Teotihuacan, it's legacy, to justify their expansionism
B)The Aztecs believed to a large degree that Teotihuacan, Tula and Tenochtitlan were three incarnations of ''Tollan'' : the capital city, the pinnacle of civilization (''toltec'') that thanks to cyclical time will fall a day, but will be rebuilt by a tough group of warriors nomads (''chichimecs'') that will rebuilt it and become ''civilzed'' in their time.
TLDR : for Aztecs, that a group of unstoppable warriors come to unseat them was quite normal, since their own mythos was them doing exactly this for the sake of rebuilding Tollan. That those would have been ''white'' warriors is much more discutable, as well as the association with ''Quetzalcoalt'', Quetzalcoalt being the divinity of the urban dwellers by excellence.
The Aztecs, rulers of a grand empire and used to constant rebellions, were not exactly stupid : they gathered rather quickly that the Spaniards were there for conquering, which, per cyclical time conception, was excepted to come a day. While it's possible that some existential dread seized Montezuma, the Aztecs likely thought that the Spaniards were ''teotl'' in the sense of replaying the rise of power of the Aztecs (AKA, Cortès is the latest avatar of a tough tribal leader cosplaying a war god that come to remove from power the city dwellers that do not longer honour with enough fervour the Gods)