Wow, you're lucky; at least demons sometimes show up for you:(, but for me, they either run away or I must have set the difficulty level too low...
Well, here's what happened (I'll say right away that I have the Gold Edition with version 3.1):
I run to the first Castle, visiting the mage's hut (or whatever it's called) and getting distracted by other minor things. I stop, leaving one hero to gather resources and sending the other to scout the area around the second Castle. If the army in that Castle is small, I immediately capture it. No matter how many days I wait, the red player doesn't show up. So I forget about it... during these days, I, of course, develop my cities. So, at the end of the 2nd week - beginning of the 3rd, in the first Castle, I've built at least a level 6 creature building, and in the second - a level 4. I take Shade (in other sentences, she will be referred to as 2HG) and her army from the second Castle and go to gather resources nearby again. I take Raileigh (in other sentences, he will be referred to as 1HG) and his army from the first Castle and go to the southwestern portal. Just then, Irbeth runs up from there and runs away in terror:D. I barely catch up and defeat her so she doesn't interfere. 2HG goes to the northeastern portal and meets a demon and a ranger along the way. They timidly run away in different directions. 1HG goes to the western Castle and captures it. Letos and Vaishan (or Sinithar:confused:) run past. 1HG kills them. It's the beginning of the 2nd month. 2HG goes for reinforcements, and 1HG runs towards the southwestern Castle. 2HG runs towards the northeastern Castle. It's the 2nd month, 3rd week (oh yeah, by this time, the blue player stopped running to my Castles, they basically gave up:smile15:). I combine the armies of 1HG and 2HG and capture the northern Castle. Before going to the last Castle, I remembered about the demons. I looked at the place where the mage's eye showed... and there were just 3 demons standing there... the danger level of one is very low, the others - low. I don't understand why they didn't attack me... Oh well! Finally, I captured the last Castle, and the mission was completed.
But I still don't understand the point of the demons:smile32:. Maybe it's because of the difficulty level, or maybe because of the patch...