Demon is the name given to the casual inhabitants of Hell. One of two ultimate fates await a demon: they are to be reincarnated into a new mortal life or they are to become Archdemons. The latter fate can be triggered by eating the Fruits of Hell: it is not clear what the criteria for the former fate is or how a demon can meet it.
The rank-and-file inhabitants of Hell, they are the equivalent to the Guardian Angels of Heaven. Demons are occasionally released from Hell by gods or by the King of Hell: their purpose is usually to cause trouble or promote sin. In order to ensure they remain in line, demons are given strict instructions as to their tasks and how they may or may not deviate from their missions.
Ironically or perhaps deceptively, they seem to have quite an Angelic look while in the realm of the living, wearing a white robe that covers their entire body. Although, when in Hell, they wore grey and dirty robes, as Gabrielle did when she was a Demon.