The word demon comes from the Greek word daimon which means 'intelligent'. In Christian theology, the power of evil and destruction embedded in the structure of things, which may take possession of men and which is conquerable by divine grace. This concept, which played an important role in the New Testament and in traditional Christian thought, fell into disrepute in modern times until its renewal in the 20th century by the eminent German-American Protestant theologian Paul Tillich. His analysis and interpretation of the demonic made it a familiar term in contemporary theological and cultural discussion, and it was applied to social and psychological as well as religious phenomena.
The demonic, in this view, comes into play whenever any finite, conditioned, and partial aspect of reality is taken as ultimate - for exemple the state, the church, a class, a race, the faculty of reason, or vital force. Culture, society, the mind, religion, man's highest spiritual efforts, all are subject to demonic possession and destruction when they go beyond their essential sphere and function to claim ultimacy for themselves. This ultimate claim of finite entitles or aspects inevitably brings about contradictions, conflicts, and splits between and within minds, nations and religions. Being split is a prime characteristic of the demonic.
Resource from this split state and the demonic possession and loss of freedom that it entails cannot come from human efforts, in the Tillichian view, but only from divine power and grace. This is not simply the divine that is set over against the demonic in a conflict of two opposing powers, but the divine that includes the demonic as part of an all-embracing reality, participating in a disorted way in the sacred or divine. The ambiguous relatedness and separation of the divine and and the demonic are manifested most obviously in religion, in which institutions, practices and modes of life aimed at divine service assert the demonic claim to be divine and holy themselves.
The King James Version of the Bible often used the term "devils" in the Hebrew Scriptures, which some readers assume are Satan's demons. Other translations use "heathen gods," "idols," etc. In reality, they simply refer to the Gods worshipped by Pagan tribes (or the idols that represented those Gods). Indwelling, evil spirits also appear in the Hebrew Scriptures. But they were not dispatched by Satan; they were sent by God to torment people.
Demon | Myths and Legends