Euthyphro gives an argument in favor of this proposal:
1. Zeus prosecuted his wrongdoing father.
2. Zeus is a god.
3. What the gods do is pious. [This premise is implicit]
Therefore, 4. To prosecute the wrongdoer is pious.
Socrates objects that this proposal lacks generality. It does not apply to all pious acts, only that of prosecuting the wrongdoer. To state what piety is, one must produce "that form itself that makes all pious acts pious." From this objection we learn a criterion for a good account of a kind of thing:
Specific instances fall under a kind by virtue of a form that makes it a thing of that kind.
So being dear to the gods is the form by which all pious acts are pious. There is sufficient generality. In fact, this generality is implicit in Euthyphro's argument for the first proposal. But Socrates objects to this modified proposal on the grounds that there is no conformity among the objects dear to the gods. They disagree about the "just, beautiful, ugly, good and bad."
Euthyphro modifies the second proposal to overcome this objection. One need only restrict the account to areas of agreement.
What is pious is loved by all the gods, while what is impious is hated by them all.
Socrates first raises an objection which he immediately drops: that we cannot tell which acts are dear to all the gods. The issue at hand is not whether we can identify pious acts, but what they are. (This distinction highlights the difference between the philosophy of knowledge and the philosophy of reality.)
A second objection is more subtle. Even if it is true that the gods love all and only what is pious, this does not by itself tell us what piety is. In philosopher's jargon, it gives the extension or reference of the notion of piety, but not the intension or meaning of the notion.
The third objection is the most crucial, and most difficult to understand. Suppose we agree that the pious is loved by all the gods. We can distinguish between a characteristic ("affect or quality") of the pious act -- its being loved -- and an action of the gods -- their loving it. The question Socrates raises is which of the two explains the other. Is the pious loved because because the gods love it, or do the gods love it because it is loved? It is clear that the activity of loving is what causes the thing to have the quality of being loved, so the pious act is loved because the gods love it. In general, a thing is not "affected because it is being affected, but because something affects it."
Socrates then asks the question, "why do the gods love a pious act?" and Euthyphro responds that the gods love it because it is pious. Socrates siezes on this response to prove that 'being loved by the gods' is not the meaning of 'pious.' If it were the meaning, then we could make the following inference.
1. The gods love a pious act because it is pious.
2. 'Pious' means 'beloved by the gods.'
Therefore, 3. The gods love a pious acts because it is beloved by the gods.
But it has been agreed that loving explains being beloved, contratry to the conclusion 3. Since 3. follows from 1. and 2., either 1. or 2. must be given up. And since Euthyprho has accepted 1., premise 2. has got to go. Being beloved by the gods is merely a characteristic of the pious, not what the pious is.
This new account really only pushes the problem back a step. For to be understood, it requires that we know what justice is. Plato, however, did not pursue this problem until a later book, the Republic. Instead, the discussion is shifted to the notion of "care," as Socrates asks in what way an act could pertain to the care of the gods, since they do not benefit from care in the way horses or people do.
Euthyphro now runs into further difficulties. He states that care of gods is service to them, as masters of the human race. But Socrates shows that any kind of service Euthyphro can describe is to some end. When he asks what fine things the gods achieve through this service, Euthyphro changes the subject.
Socrates again establishes that there is nothing lacking in the gods which humans could give them. So the point of sacrifice and prayer is to please the gods. If so, then what is pious is what is beloved by the gods. This is Euthyphro's second proposal, which has already been defeated. Socrates suggests that they start over, but Euthyphro finds an excuse to leave.