Varro attempts to articulate a "Natural Theology," wherein the world is a living organism (and a divine one at that), which involves a life force that pervades all of existence, a higher level of existence that we call "sensation," and the highest level of all that we call "reason." In drawing out this explanation, Augustine suggests that Varro is trying to escape from "Civil" theology into a purer and rational religion, but Augustine is having none of it. Despite his best efforts, even Varro's natural theology is shaped by the false views of the gods and of existence that come from civil theology. And although Varro seems to be both aware of and uncomfortable with this fact, he nevertheless proceeds from a false foundation, and so the whole house of his theology is rotten from the start.
And yes, I am running out of ways to summarize the same thing over and over again. I am impressed that Augustine is not.