I agree with you about the lack of kings in Germanic society. Or pre-Celtic Britain in places like Skara Brae. But that doesn't mean that they were theocracies. I think people living in small settlements had a tendency towards flat hierarchical structures that were a rough sort of democracy (if you were a man and not a slave that is). It's only really when you get bigger settlements that political decisions can't be thrashed out in a discussion around a camp fire then a show of hands.
Sure. And serves as an example of variety.
If I am going to suggest a pattern, theocracies tend to arise naturally in more sedentary, agricultural societies, where control of natural forces (rains, floods, etc.) are of paramount importance for the survival of agriculture. In such cases, the magical power of priests are really important and they are the first class to become differentiated from the rest of farming society. This is the pattern we see in Egypt, Levant, Mesopotamia, China, India, etc.
Pastoral herding communities are not as beholden to rains, floods, etc. so control of natural forces matter less to them. Germans did have their priests & priestesses, who were special, and
could have made the leap to higher ruling caste, had German herdsmen actually given a toss about the rain. So the "rough sort of democracy" you talk about would have probably been the norm in herding societies, not-so-sedentary and proto-agricultural (where agricultural tillage was a minor activity). We see this in early Celtic & Germanic Europe, but also the Eurasian steppes, North America and Sub-Saharan Africa.
Even so, we have witnessed the rise of priests as rulers even in such societies documented in real-time, e.g. the great priest of Chota emerged as paramount leader and established a theocratic state over the Cherokee in the mid-18th Century. A half-century later, further north, Tecumseh's authority in the early 1800s was based on being a lieutenant to his brother the Shawnee prophet Tenskwatawa, who had emerged as authoritative over Northwest Territory tribes. The Cherokee case is very much on the pattern of reception of foreign trade goods, with priests using that as leverage to take control of their societies. The Shawnee case more about being embattled in holy war (possible similar to the German prophetess Veleda during the Batavi revolt, although details are missing).
Roman Latin writers very much "looked" for kings in the tribes they dealt with, and tried to cultivate them. And so we end up with nobodies like Arminius, temporary war chief, being recorded as some sort of king, when he was no such thing and was quickly gotten rid of. But some Germanic tribal spokesmen did use their negotiating power with Rome, and acquisition of Roman trade goods, as leverage over their tribes to actually elevate themselves and actually
become kings.
So the route to kingship can come by alternative paths. It is not necessary to be a priest first. But if I would say there is a common feature in paths to kingship it is to position yourself as distributor of desirable goods. It can be distribution of sacrificial temple gifts, distribution of foreign trade goods, or distribution of war plunder. But you don't earn kingship by imposition of force or valor. You buy that initial loyalty and allegiance with stuff.