The most common and most likely answer to this crossword clue is the 5 letter word AFRIT
I've seen this crossword clue in The Guardian
A
F
R
I
T
More clues leading to the result AFRIT
Buddy explains!

The straight part
We know that "demon" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case demon = afrit.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does AFRIT mean?
AFRIT noun- (Islamic mythology) a kind of djinn mentioned in the Qur'an.