The upcoming novelization for The Rise of Skywalker, written by Rae Carson, reveals that Palpatine’s spirit lived on in a clone body.
This gives a large part of the answer for how he returned, and the novelization makes it seem almost as if this clone body, which serves as the host for his spirit, can’t contain his immense power with the dark side. This answer is actually given in the movie, as Beaumont Kin mentions cloning as a possibility (just without certainty that it’s the true explanation). But it turns out there was a far more explicit answer recorded that wound up cut from the film.
A video of Ian McDiarmid speaking about this recently surfaced on Twitter, in which he revealed that, in that first scene with Kylo Ren, there was an exchange that went like this:
Kylo: “You’re a clone.”
Palpatine: “More than a clone, less than a man.”
As McDiarmid points out, this would have come right after we had seen the other clones of Snoke in the tank, so cloning would have fit in perfectly within the narrative. However, this line also would have highlighted the fact that, though Palpatine’s body was a clone body, he was more than a clone – therefore distinguishing him from Snoke a bit.
To me, this seems like a line that absolutely should have been included in the film, and I’d be curious to hear why it wasn’t. It wouldn’t take long, being just two additional lines (give or take, depending on the context), but would provide an important tidbit in our understanding of how Palpatine actually did return. So I think it probably would have helped to include it… however, it wouldn’t have magically solved all the questions. Though that line tells us more than the final film did, it still doesn’t explain that Palpatine’s spirit resides in a clone body; we’re left to speculate about what this line means. So, in other words, my point is simply that even if this line were in the film, people would criticize the film for not answering how he returned.
That aside, though, I do like this line, and I like the explanation. While I’m not a big fan of cloning in general (and didn’t like the cloning decisions of Legends), I actually think it does make sense in this context, and is confined enough so as not to create tons of crazy possibilities. I think this is probably the best of the reasonably possible explanations for the return of Palpatine, and I’m glad that we’re getting some of those questions answered.