The term demon either refers to Senior Demons or lesser demons.
Demons are very powerful beings and are not to be confused with lesser demons who are not capitalized. Their names look like mathematical expressions, for example, the Demon X(A/N)^TH. But they also have simpler forms of their names. The simpler name of the Demon previously mentioned is Demon Xanth. This Demon is the one responsible for all the magic in the land of Xanth. There is also a Demon Earth who is responsible for gravity in Mundania as well as in nearby Xanth. Demons live for what may be forever and can do what may just be everything. Being omnipotent and omniscient can result in boredom. For this reason, Demons often play games with each other and commit to certain trivial penalties for loosing, such as remaining in one place for thousands of years.
These are the common demons and their natural form is that of a dust cloud. Outside of the magic, they turn into dust storms.