If you haven't played the Myth series, you're probably unfamiliar with the Avatara. Here's my version of them, as of the year 2841AE. By the way, "Avatara" is both the singular and plural form of the word.
Originally, the Avatara were any archmages above a certain level of power who were sworn to protect the interests and people of the Light. Over the centuries (and Avatara tend to live for centuries), the term came to refer to a specific club or organization of archmages who met these criteria.
By the time the Great War had officially begun, they were down to nine in number. Actually referred to as The Nine, they served first as a strange hybrid of advisers and elite magical commandos, influencing the war effort strategically and politically when not in the field fighting back the hordes of the undead. Eventually they outright took over leadership of the entire government of the Free Cities of the North (and thereby the Province, and thereby the entire war effort). Alric, one of the Nine, became the new King of the Free Cities of the North. This whole transition happened peacefully, and it was greatly celebrated by almost everyone, since the previous leadership had proven incompetent, but it would be inaccurate to say that nothing underhanded occurred at all. Those few opposed to the regime change were too busy dealing with the Dark to do much about the Light's leadership, and the Nine certainly made sure they stayed busy.
By the war's end, the Nine had been reduced to one: Alric. He scraped together the few magic users left alive that were allied with the Light, took as much time away from ruling as possible, and taught them what he could. They then taught others, and powerful archmages began to appear again. On top of that, the Warlocks of the Scholomance were still secretly running around, but that's another story. The bottom line is that Alric engineered the rise of new Avatara.
During the course of the Second Great War (or Soulblighter's War), Alric crowned himself Emperor of the Cath Bruig. After the war, Muirthemne was rebuilt, and even the land itself was partly restored, carving a small chunk out of the Barrier around the capital where plants could grow again.
Upon taking the imperial throne, Alric transformed the Avatara yet again. Now, the term "Avatara" did not just designate a member of a special club of archmages who also happened to all be in political positions; "Avatara" now refered to a specific, official political office. If the Emperor was the President, then the Avatara would be the Senate. Except they also went out and kicked ass in the most extreme situations, so they were also kind of like the Justice League or the Avengers. Imagine if Iron Man and the Hulk were Senators, and Thor was the President.
Needless to say, the modern Cath Bruig Empire is a Magocracy at the highest levels of power, and to a slightly lesser extent, through-and-through. Technically, one does not have to have any powers or know a single spell to be an Avatara, but in practice no one has ever obtained the office without being a high-level mage. This isn't a problem as long as the Emperor and all nine Avatara are honest, just, intelligent people, but one doesn't have to be a political science major to see the potantial problems with this setup.
So to summarize, the definition of Avatara went from "powerful magic-users who serve the Light" to "this specific club/group/cabal of powerful magic-users who serve the Light" to "this specific political office that is sworn to serve the Light, and oh yeah, by the way, everyone elected or appointed to the position so far has been a powerful magic user, fancy that."
How does all of this affect the players? Well, they can aspire to join the Avatara or even take the imperial throne once they get powerful enough, of course. If the players go full supervillian and do anything too awful in public and prove to be too tough to for local law enforcement, the Legion, or even the Heron Guards to take down, one or more Avatara could show up to fight them, which could be fun. Living in a magocracy means that the players could leverage the "Magical Might Makes Right" concept in a number of creative and useful ways. And if an all-out war breaks out and the campaign turns into a Chainmail or Warhammer-style wargame of some kind, the Avatara would make useful battlefield allies or cool enemies.
The important thing when using high-level NPCs is to avoid turning them into DMPCs. I've vowed not to be overly invested in the Avatara, which is to say that I'm fine with the players killing them or otherwise screwing them over, provided they can deal with the logical consequences. No railroading and no trying to outshine the PCs. It's not hard to provide problems that the PCs have to deal with without help from high-level NPC allies; the Avatara are usually busy, they have a hard time giving a crap about things they (erroneously) think won't affect them, they tend to be as crazy as all magic-users, and each of them can only be in one place at a time (barring costly magical efforts, at least).
The biggest potential problem I think the Avatara could likely cause in my campaign is that they could make the party feel unheroic or unimportant even when they take the most heroic or influential actions possible. (Not that the players have to be heroes; there's nothing wrong with playing a party of scoundrels who are out for themselves. In practice, my players shift rapidly back-and-forth between being heroes and scoundrels.) Here's an example: in one adventure, the party found out about some illegal arms deals and other criminal activities in progress. They chose to alert the one Avatara they were acquainted with. I decided that the criminals were divided up between two locations. The Avatara tackled one "offscreen" and sent the party to the other. He impressed upon the party that both tasks were important (I want to say "equally important," but I don't remember for sure exactly what the Avatara said) and that he was counting on them, and he also could not rely on backup outside of the party because he needed to keep the whole thing discreet.
Was this the right way for me to handle the situation? My players had no complaints, but I worry about this kind of thing.
Right now, I'm using the Avatara as quest-givers and background flavor, but they might have more interaction with the players soon, depending on what they do and where they go next. I'd love to hear feedback from any DMs reading this: how often do you involve NPCs in your games that are more powerful than the PCs? Does it ever cause problems or make the game less fun? How do you mitigate the risks? Do you think it's worth it?