Demons will be presented as an optional faction, only on the Necropolis continent and nowhere else. I'll explain why.
They are the second tier of evil. If Necropolis is like a plague, they need human flesh; it's their food. The goal of demons is the soul. They can latch onto one of the sins: pride, greed, gluttony… and exploit it.
Since there is no evil on the human continent initially. People are free from vices, so the only place where demons can gain a foothold in the world is the Necropolis continent. That's where evil has accumulated in abundance.