And the Tao te Ching describes how things come to be:
The Dao is empty,
But when using it, it's impossible to use it up.
It is profound, seems like the root of the myriad things.
Even if you do not use the Tao but some other ordering principle -- you want it to be simple. Cluttering up the roots of things is unwise. This doesn't mean you can't have gods by the dozens or even by the billions, but it does mean that the guiding rule for them has to fit them into the puzzle, if only as the gods of the city or of the household. A character more concerned with warding off the plague, stopping the drought, ensuring healthy children and a good harvest, and avenging the theft by some unknown soul probably won't concern himself too deeply with how they all fit together except practically, and most characters in most societies fall under that. A rhetorical unity, emotionally convincing, will make it look not kludged together.
But, of course, you may want to go up higher. The fun arises in that you want the work to give a convincing appearance of the myriad things, and still have the unifying ordering principle. It gets hard to juggle the higher up you go. Cross-over folklore, where you have selkies and fox maidens and rakshasa all waltzing about and discordant because of their divergent sources and clashing details, but cross-over cosmologies, where you try to throw in the kitchen sink, start to seriously clash. It's one thing to have a rainbow be the trail of the messenger goddess, and the bridge to the home of the gods, and the sign that the rain will not flood the earth if they are just stories, but introduce the gods themselves and things start to get hard to juggle. Rick Riordan managed to imply that his Egyptian series takes place in the same universe as his Greek one, but he didn't go deeply into the details. And when you go into the details, it tends to demote the gods, severely, from the Powers That Be. (Though that's partly because they have to be numinous as the Powers, which is hard to pull off.)
But -- to take two urban fantasies, Jim Butcher's Dresden Files and Seanan McGuire's October Daye series -- Butcher throws in the kitchen sink. We get angels out of Heaven acting. We get the Winter Court and the Summer Court of the fairies, and these actually control the seasons. We get Lovecraftian horrors lurking outside. We get no less than three courts of vampires, all nasty, but different. Now, in McGuire's work, we have the fae. And nothing but the fae. To be sure, this lumps in the peri and a few other beings that have to be naturalized to fit in, but it doesn't use too many of them, or discordant ones, and anyway, they are all the sorts of beings that wander about the earth. Overarching that, we do not have the world-establishing principles, but those that established the courts, and what's more Oberon and his ilk are safely off-stage. Only a handful, even, of his First-born appear. All the scads of types of the -- ehem -- Good Folk arise from simplicity. I think it works better.