Demon is a broad term generally used to describe any powerful, immortal being that is not aligned with either the Gods or Dragons. Typically the term is considered synonymous with evil, or at the least extremely selfish, intentions - although in practice there is no particular reason that a being of this type should always fall into those categories.
Most Chaos Demons originate in the Wild Sea and somehow succeeded in breaking through the perimeter of Reshomme, often in the Great Breach. Beings of this kind are something of an anomaly on all fronts - since although they are born from a world of constant change, they themselves may endure almost indefinitely once within Reshomme - thus vastly outliving their fellows who remain in the Wild Sea. Although these demons generally find Reshomme almost unbearably static and orderly, and frequently seek to shatter its stability and spread the warping influence of the Wild Sea, they themselves benefit greatly from the underlying structure that can be found only within the Spheres.
Demons of the Netherworld are similarly strange and driven individuals, although they often have no great plans beyond their own continued existence. Typically these are spirits who refused to fully relinquish their memory and personalities on death, and by keeping tight hold of these experiences over the following decades, or even centuries, were able to develop great personal power and strength of will. The true test of these beings is simply to retain some sense of self, and then find a route back to life. Unfortunately the very experiences that forge their wills, and teach them the magics they need, often drive them mad or make them hateful of those who enjoy life without having struggled to achieve it.