1. If I may, Lou has touched on the subject of Demons and although I may not be right on the money with my below explanation You should Read some of Lou's other material/Books as well since it expands on your question a bit more.

    From my Understanding Demons are/can be Damaged souls that have festered way too long in hate/Done terrible acts and enjoyed them immensely or simply souls overcome with hate or even Rebel Souls on the path of causing mischief for the sake of it on orders or not. The reasons These souls/Demons are allowed to sometimes create havoc in other souls lives/Realities are way above my Pay grade so to say.

  2. How are the fictional books taken as fact by people?

  3. You must be referring to what as children our school teachers referred to as history books, but I digress... "Facts are only accepted fiction, of course, but the ideas must make sense and fit into the accepted "story." -Seth, The Nature of Personal Reality