The way I interpreted it is that the prayers are what led to the wolves becoming gods and the people were the ones who came up with the idea of a sacrifice in exchange for protection.
At the very minimum this is the 3rd ritual since a previous chapter showed the remains of 2 wolves so it's been going on for at least 99 years now.
The difference in this ritual was Hiou's desire for Saya so he actually attacked the livestock and fields but the entire sacrifice thing probably isn't even necessary. Even though he said the ritual was so they remain as gods I still think he was following traditions thinking that by not doing so the people would stop praying which would lead to their end.
This arc was pretty vague in general but that's my take on it.
@OnlyTruth Nope. It is not that kind of stupid story.
@TsumomoiHedeka Disposing of a god is never good. The mountain will lose the protection, the balance is broken, and bad fortune will happen. A new god, might not be the wolves but another youkai, will replace him but the new one might be cruel and demand more sacrifices. People cannot abandon their faith that easily and that will give birth to new god. It will never end.
Watch Mononoke hime or read other manga like Kekkaishi and Mushishi to understand Japanese mythology.