We have studied the alignment of colloidal gold nanorods, deposited from solution onto well-defined substrates in the presence of an AC electric field generated by micrometer spaced electrodes. The field strengths employed in our experiments are sufficiently large to overcome Brownian motion and induce accumulation and alignment of the nanorods in the region near the electrodes with their long axis parallel to the field. However, despite the large fields, we find that the degree of alignment is considerably smaller than what was previously reported for field-induced nanorod alignment in suspension. We show that hydrodynamic interactions and capillary effects during drying, as well as friction of nanorods on the substrate surface, to not play a major role. The limited alignment of nanorods is ascribed to the different experimental configuration and the correspondingly larger density of nanorods. The mutual interactions of nanorods give rise to a disturbance of the local electric field and therewith their orientation. For sufficiently large field strengths, these interactions lead to the formation of nanorod chains that ultimately bridge the electrode gap. Furthermore, for small electrode spacing, the nanorods accumulate on the electrode surface, and the screening of their mutual interactions results into considerably improved alignment.