Nazis sincerely believed that their nation was in a permanent state of and existential racial war with the Jews and the other “alien nations”. Consequently, they viewed their state (and the whole German people) as one giant army.
Another reason for this (incorrect) perception was the personal experience of Adolf Hitler – the architect of the Nazi state – who was for more comfortable in the military than in the civilian environment.
Army is fundamentally incompatible with democracy of any kind. Consequently, the Nazis quickly rejected the parliamentary democracy (courtesy of Marinus van der Lubbe) and transformed the Weimar republic into a totalitarian Nazi state.
An army (any army) always has the commander-in-chief. Any military unit needs a commanding officer. And the Nazi “military state” was no exception, of course.
Consequently, they structured the whole state, their whole political, economic and social system (and even their culture which they treated as just another weapon in their existential war) according to the omnipresent Führer Principle. Thus making it a Führerstaat – “state of the Führer”
Interestingly enough, the Führerprinzip was invented not by Nazis but by one Hermann von Keyserling – an ethnically German philosopher from Estonia. He was a firm believer in Social Darwinism and thus preached that certain “gifted individuals” were “born to rule”.
Which, actually was quite correct as leaders are, indeed, born. If one is not born with built-in leadership talent, no amount of training will make an individual a leader.
According to Führerprinzip, each organization (of any kind) is a hierarchy of leaders, where every leader has absolute authority and absolute responsibility in his designated area, and thus demands absolute obedience from his or her subordinates him and answers only to his superiors.
In reality, however, this principle was blatantly violated because the overlap in responsibility areas between branches of the Nazi state (NSDAP, SS, Wehrmacht, civilian government, etc.) and even within the same branch was the rule, not the exception.
Consequently, the whole system was far less efficient than it seemed (but still efficient enough to perform the miraculous quantum leap and achieve no less miraculous military victories).
The Führer (“supreme leader”) of Germany (Adolf Hitler) combined in his persona executive power, legislative power and judicial power, although he rarely (if ever) used the latter.
But the Nazis went much further than Führerprinzip. They effectively declared Hitler infallible (actually, one of the reasons why Germans fought so stubbornly for Hitler and worked so hard for him until the very last days of the Third Reich was that they until the very end believed that the infallible and omnipotent Führer would perform a miracle and lead them to victory).
Thus making Adolf Hitler essentially a Godlike figure and national-socialism a pagan religion (actually, a charismatic totalitarian cult of The Führer). In theory, Adolf Hitler, answered not only to God but to the German people; however, Nazis did not develop any mechanism for control by the people over the decisions made by Hitler or for correcting the inevitable mistakes made by their Führer.
Instead, they pretended that Adolf Hitler ultimately will be able to correct any mistakes himself, eventually make the right decision and lead them to victory in any battle (and ultimately the whole existential war).
Which did not happen. Failure to correct enormous strategic mistakes (blunders, actually) of their Führer inevitably resulted in the devastating defeat on the battlefields of World War II, wholesale destruction of German economy and infrastructure, ultimate demise of the Third Reich and Hitler’s suicide in the Führerbunker.