By taking the year of gods i.e 360 earth years we get a huge time frame of 360*1200 = 432000 years for Kaliyuga. Are we not making God a material being by assigning such numbers which could also mean that Gods are also subject to birth and death cycle. God is supposed to be omnipresent. kindly share your thoughts.
By years of the Gods, they mean Devas. Deva, Nara and Asura are the 3 broad classes of beings. Devas are celestials. Everybody is a manifestation of GOD, but Devas are the ones whose consciousness levels are prevalent in the higher Lokas and are closer to illumination and purity, whereas humans (nara) live in the Bhur Loka where we are subject to both illumination and ignorance, hence we suffer as well as receive pleasure. Asuras on the other hand, along with Nagas, live in the Talas, which are situated below Bhur Loka.
My dear son Nārada, know from me that there are seven lower planetary systems out of the total fourteen. The first planetary system, known as Atala, is situated on the waist; the second, Vitala, is situated on the thighs; the third, Sutala, on the knees; the fourth, Talātala, on the shanks; the fifth, Mahātala, on the ankles; the sixth, Rasātala, on the upper portion of the feet; and the seventh, Pātāla, on the soles of the feet. Thus the virāṭ form of the Lord is full of all planetary systems.
(Srimad Bhagavatam 2:5:40-41)
Unfortunately I could not find the citation for the Lokas.
As per the macrocosmic level, Devas exist externally as a conscious force/vibration/energy in the universe, who can be invoked by mantras. Its these Devas whose time is taken into account while calculating divine years.