The "demon" is actually an , the original host species of the Goa'uld, possessed by a symbiote serving the System Lord Sokar. Sokar used this medieval religious setting to maintain control and fear, with a local leader known as The Canon enforcing his will through superstition. Plot Summary
The Canon labels the SG-1 team as "evil spirits" for coming through the Stargate, which the locals call the "Circle of Darkness". [S3E8] Demons
Tell you more about the and their history with the Goa'uld. The "demon" is actually an , the original