A demon is term used for mysterious beings invoked from another planes. They can take their own form or possess body of animal or members of the intelligent races. Art of summoning demons is called goetia and is banned by both clergy and Brotherhood of Sorcerers. It would appear as though Demons are not a single race but a catch-all term for creatures of a similar nature, as they are extremely different. If Master Mirror is indeed a Demon, he is an incomprehensibly powerful one. Whereas the Caretaker seems to be merely a slave.