gamehuntera
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A little about the etymology - the word "demon" comes from Greek and originally meant, as we know from Plato's writings about Socrates, a child of the gods, but not from humans, but from lower mythical creatures (nymphs, etc.). A demon was then a positive being, but Christianity, in the process of its introduction, used such an unfair method as discrediting its opponents, and thereby declared all mythical creatures - and demons along with them - as evil.
So what? Might & Magic and the real world, fantasy and everyday life are not connected. After all, there are some canons in fantasy, and one of them defines demons as evil. Or will you play as a race of small, inferior, and good demons? Unlikely.
1 - they should, in theory, be disproportionately powerful
In theory. But according to the same fantasy canons - not really.
2 - their existence (especially angels) may be offensive and unpleasant for religious people
Hmm... Angels are already in the game. What's next?