In their commentary Adele Berlin and Marc Zvi Brettler have this to say about Psalm 82:
A vision of a heavenly court where God condemns those who judge unfairly. The psalm plays on the word "elohim," which means "god" as well as "divine beings." The notion that other divine beings exist is found elsewhere in the Bible (see v.1 n). In later biblical thought these beings serve as ministering angels to God and are never equal to God (cf. Ps. 89.5-8). An earlier view is reflected, and then rejected, in this psalm, according to which the divine beings each represent one nation, serving as that nation's protector, a remnant of the idea the world was populated by many gods, each assigned to a different nation (cf. Deut. 4.19 and 32.8, according to the LXX and the Dead Sea Scrolls). This psalm forcibly rejects the idea of other gods; God deprives them of their divinity and He alone has dominion over all nations. In content and language, the psalm resembles prophetic criticisms of the oppression of the poor, including the denial of access to the judicial system and the disadvantages faced by the poor in obtaining just verdicts. Through the scenario of the heavenly tribunal, the psalm speaks to the issue of a just society, without which the world cannot exist. It also speaks to the universality of God, the supreme judge over all nations.
The JPS Tanakh translation reads:
A psalm of Asaph. God (אלהים) stands in the divine assembly; among the divine beings (אלהים) He pronounces judgment. (Psalm 82:1) [JPS 1985]
About verse 82:1, Adele Berlin and Marc Zvi Brettler note:
…God, "elohim," as in the preference in Pss. 42-83, rather than the Tetragrammaton (YHVH); this substitution creates some confusion in the Heb. Stands, rises to render a verdict. Cf. Isa. 3.13-14. Divine assembly, Heb "the assembly of El." El was the head of the Ugaritic pantheon. Perhaps originally a separate deity in early Israelite religion, the name "El" became synonymous with YHVH. Divine beings, the celestial council. Cf. Isa. ch 6; 1 Kings ch 22; Job 1.6. Some commentators prefer to interpret this use of "elohim" as human judges, but this is less likely.
The verse is potentially confusing since Asaph chose אלהים, vocalized as אֱֽלֹהִ֗ים to refer to God, then used the same word vocalized as אֱלֹהִ֣ים to refer to those whom God is among. The confusion could have been avoided had Asaph referred to God as YHVH, as in an earlier Psalm:
A psalm of Asaph. God, the LORD God (אל אלהים יהוה) spoke and summoned the world from east to west. (50:1)
The two scenes have some similarities:
Psalm 50: God the LORD God (El Elohim YHVH) summons the entire world
Psalm 82: God (Elohim) stands in the divine (elohim) assembly
As Asaph is identified as the author of both psalms, it is reasonable to conclude he intends to convey the nature of God is not simplistically, "God."
Elohim - Divine or Earthly
Bible Gateway lists 53 translations of Psalm 82:1.
3 The majority, 39, have divine assembly, or among the gods, or something similar. However, 8 have an earthly assembly. For example:
God takes His stand in the great meeting of His people. He judges among the rulers. (NLV)
Six have what I would classify as an ambiguous reading. For example:
God presides in the great assembly; he renders judgment among the “gods” (NIV)
A psalm of Asaf: Elohim [God] stands in the divine assembly; there with the elohim [judges], he judges: (CJB)
The translation of "gods" or Elohim and elohim (uncapitalized) suggests a translator recognizes the possible uncertainty in the word within a text lacking capitalization and found a way to indicate two possible meanings.
Elohim is found 2,606 times in the King James Version. It is almost always translated as God or god(s) or some other divine being(s). There are 5 times the word is rendered as judge(s); 2 times as great; 2 times as mighty and once as exceedingly.
The first time the word is translated as "judges" supports seeing a similar reading in the Psalm:
Then his master shall bring him unto the judges; he shall also bring him to the door, or unto the door post; and his master shall bore his ear through with an aul; and he shall serve him for ever (Exodus 21:6 KJV)
However, "God" is also possible:
then his master shall bring him to God, and he shall bring him to the door or the doorpost. And his master shall bore his ear through with an awl, and he shall be his slave forever.
(Exodus 21:6 ESV)
Essentially, the KJV sees the word as plural so "elohim" = "judges" while the ESV sees the word as singular so "Elohim" = "God". This highlights the inherent ambiguity of monotheism where "God" is written as the plural form of the singular אֱלוֹהַּ (elowah). There are different theological explanations why a plural word is used for a singular God, but there is no compelling reason why the singular elowah, which always conveys a deity, should be rendered as an earthly entity when written as plural. In other words, since nowhere is the singular elowah understood to be an earthly judge, it should not become "earthly judges" when written as plural. I believe the better approach is to consider why "God" might be called "judges."
The potential confusion in a judicial setting reflects the reality a human judge who follows the Law takes on the appearance of God. In Exodus, the ESV more accurately reflects what is described since a judge who judges according to the Law renders the same decision as God. Such judges could rightly be called "gods" as the Psalmist acknowledges:
I said, “You are gods (אֱלֹהִ֣ים),
sons of the Most High, all of you (82:6 ESV)
The flow of the Psalm begins in a courtroom where God (Elohim) stands and ends with a call for God (Elohim) to arise and judge the earth:
Arise, O God (אֱ֭לֹהִים), judge the earth... (82:8 ESV)
If the first setting is earthly, there should no need for God to perform a second judgement. On the other hand, a heavenly vision followed by admonishments to earthly judges to act as God does, would acknowledge judges could be called "gods," and end with a call for God to arise and judge the earth.
The meaning of 82:1 is properly understood as found in the JPS translation:
A psalm of Asaph. God stands in the divine assembly; among the divine beings He pronounces judgment.
The congregation is a divine assembly of other divine beings such as angels, and/or Seraphs (Isaiah 6), and/or sons of God (Job 1), and/or host of heaven as described in Micaiah's vision (1 Kings 22:19-23). Given the Psalm speaks to judgment, I believe it should be understood as any and all divine beings. The Psalm then concludes with a call for God to judge the earth.
1. Adele Berlin and Marc Zvi Brettler, The Jewish Study Bible, Oxford University Press, 2004, p. 1375
3. Douay-Rheims Psalm 81.