The Domain with the greatest "power" takes effect, and only 1 domain can be in an area.
The "power" and size of a domain is controlled by the quality of the altar, for example a 10ql golden altar will have 18 tiles radius, 50ql - 57 tiles, 90ql - about 96 tiles, a stone altar of 21.97ql has 24 tiles radius (30 tiles radius on special tile). The domain seems to get weaker the further it is from the altar and might get overpowered by another god's domain.
It should also be noted that a few altars are still "bugged" as they were made before the recent domain changes. (5 June 2012 - [http://wurmonline.tumblr.com/post/24462560831/faith-zone-changes-achievement-bugfix faith-zone-changes-achievement-bugfix]).