Sorry, the term predates Josephus by centuries on top of centuries. The first theocracies were Greek, and they were called Theokratia, from which we derive theocracy.
Yes, the Greeks (and others) were ruled by mortal men they claimed were gods. In strictest terms, the God of the Universe does not reign on the earth. Ergo, we cannot have a theocracy in the strictest terms. Any man-centered "theocracy" is not one. Theocracy is yet to come, when Messiah rules on earth - future date unknown.
All semantics aside, who told you to fear the coming theocracy?