Ummm, Gerald Gardner didn't go insance nor did he die of a serious psychosis. Gardner remained mentally competent and really quite brilliant throughout his life. He died of a heart attack on a vacation in Tunisia in 1964. Here is the newspaper clipping about his death http://www.thewica.co.uk/Gardners%20death.htm.
Nor did he ever refer to himself as a God. He was always quite clear that he was simply a human being who was trying to recreate the religion of Witchcraft. I wonder whether you might be confusing Gerald Gardner with Aleister Crowley? Crowley was in fact mentally unstable and also a heroin addict. But Crowley has nothing to do with modern Wicca.
You are correct that the religion of Wicca is a modern one. It is true that Gerald Gardner was initiated into a coven that he believed was a surviving remnant of an ancient religion. However, he received very little information from them and the idea that they were part of an ancient religion has long been debunked. What Gardner did was to take what he obtained from that coven and flesh it out with material drawn from British folk magic, ceremonial magic, and even Masonic rituals to form a coherent whole. So what is known today as Wicca doesn't go back any further than the 1930's.