After your 5th shard you are going to be asked to choose whether to have your humans worship the light (-2 astral power/turn), whatever they please, or you (+2 or 3 astral power/turn).

Are there additional consequences to this? I am guessing there is a karma effect as well, but I am really curious to know if there is a long term gameplay plot/story result here.

The reason I ask is because it can take weeks to go through the entire game due to the need to conquer each shard separately.

I remember a dialogue with one of the masters, you were supposed to make people worship her or was it him?!? Not sure if this was an option?

IIRC if you choose yourself, you will caught a pray with choice of reward to your worshipper.

After shard 3 or 4 you encounter Beleth, an evil necromancer who ascended to masterhood via a powerful necromantic ritual. He tells you that you should serve him and will get great rewards (a fiefdom of your own within his world when its complete), his first demand of you is that you force all your people to worship him to empower him.
I said no because the guy is completely untrustworthy and also I don't want to serve an evil necromancer Is this a repeatable random event during strategic mode on shard mode, or a one time thing during astral mode?

One-time during astral.

I see, does your choice there lead to more choices or does it dead end?
Also, do these two choices affect karma?

Dead end, probably. I doubt that snowbirds reworked campaign that deep.
They are affect karma, but weight of it is abysmal, you get more karma on big shard per turn. If it could set max or min karma, it would've been interesting option, but... alas.

Thank you, good to know

IIRC the prayer question is about providing one of three boons to your people, each of which has a small ongoing astral energy cost (1-3 per turn) and provides a small karma boost. It's too bad that this doesn't seem to impact home shard defense/events, though - that would make it strategically significant.