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Usually for life as the older the ruling theocrat gets the more "venerated" they become.
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The Leaders of the church have the power, and is derived from God.
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Yes, theocracy could coexist with monarchy if the one on the throne considers himself/herself fulfilling the words of God and that he/she is inspired in all his/her doings and sayings by God.
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Devine Right Theory
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While there are many religious countries in the world, there are only a few true theocracies. The nation of Iran is ruled by the Supreme Council of Ayatollahs (although it also has an elected President). The Vatican is technically an independent nation, and it is ruled by the Catholic Church.