In many fantasy novels multiple belief systems of religion or Magic will exist together this is usually explained by saying that the systems exist simply as a physical manifestation of the beliefs of living people. I am looking for another explanation for my world.
It's easy. If you want everyone to know that every system of belief is true, yet still have people believe different things, just give people different gods. All the gods are real, but only some people belong to each god. You could have, say, the god of carpenters, or the god of a certain town. You could do by race or location or occupation or food source or basically anything you want. Obviously, carpenters won't pray to the farmer god, and cattle farmers might want more glory for their god than for the pig farmers' god. You can still have religious wars, even if everyone knows everyone is right. You could also have everyone know everyone is right and thus get along, even though different people worship different gods.
If you don't want everyone to know everyone is right, set it up so the gods themselves are fighting. God A tells his followers that he is the only god. God B tells his followers that he is the only god. God C says it's actually all just him. The followers, therefore, believe that everyone else is either mistaken or evil.
Magic could be an extension of the god. Perhaps magical items are those that have been blessed by one or another god, or that were forged in the gods' realm. Maybe gods curse some people to have some magical trait, or bless people to have some other trait. Maybe magic is it's own religion, just the force of life that some people can understand and use and that some people just can't.
The historically normal situation is for multiple religious systems to coexist peacefully. In the classical world, before the rise of Christianism and the development of an ideology of dogmatic orthodoxy, nobody even thought to start a war because of some other nation's incorrect mythology.
For thousands of years before the advent of Christianism and Islam the obsession with having one true universal religion was considered highly unusual; even the monotheistic Hebrews accepted that their peculiar religion was limited to their nation and other nation had other gods. Thou shalt have no other gods before me is an implicit admission that there are other gods.
The common understanding was that there were many gods and many ways of worshipping, respecting or placating them. The socially correct thing was to respect local custom: when in Rome do like Romans do. More advanced thinkers considered that the apparent multiplicity of gods was an illusion -- Cicero said it best: quot hominum linguae, tot nomina deorum, the gods have as many names as there are languages among humans (translation from Wikipedia).
The ancient Greeks and the Romans had the habit of interpreting foreign deities by analogy with their own; see interpretatio Graeca and interpretatio Romana; this was even a guiding principle of the Roman empire, allowing the coexistence of many religious practices as long as they did not attempt to become the one and only true religion to the exclusion of others. The Romans would have gladly placed a statue of Jesus in the Pantheon; it was the exclusivist Christians who insisted on eradicating all other religious practices.