The modern objections to the idea of the Avatar actually mirror many of the same concerns either current at the time of the Gita, or anticipated by the divine Teacher. According to Vedanta, the entire universe is a manifestation of the supreme consciousness. There is “one without a second” and “All this is the Brahman.” Taken together, these two statements provide the underlying basis for the recognition that all things that are manifested embody the Divine and there is in reality no possibility of an external Deity separate from his creation.
Sri Aurobindo explains: “Far from the Infinite being unable to take on finiteness, the whole universe is nothing else but that; we can see, look as we may, nothing else at all in the whole wide world we inhabit. Far from the Spirit being incapable of form or disdaining to connect itself with form of matter or mind and to assume a limited nature or a body, all here is nothing but that, the world exists only by that connection, that assumption. Far from the world being a mechanism of law with no soul or spirit intervening in the movement of its forces or the action of its minds and bodies,–only some original indifferent Spirit passively existing somewhere outside or above it,–the whole world and every particle of it is on the contrary nothing but the divine force in action and that divine force determines and governs its every movement, inhabits its every form, possesses here every soul and mind; all is in God and in him moves and has its being, in all he is, acts and displays his being; every creature is the disguised Narayana.”
It thus proceeds that the concept of the Avatar, rather than being something uniquely foreign and different from the rest of creation, is actually a specific intensity of the manifestation rather than something inexplicable and “miraculous” in the sense of not having any basis or antecedents.
Sri Aurobindo, Essays on the Gita, First Series, Chapter 15, The Possibility and Purpose of Avatarhood, pp. 142-143