When the Gods forged Creation they imbued everything with a spirit of its own, a soul so to speak. The trees, the bushes, serpents and birds, everything was imbued with a soul. Even the very earth and the mountains got spirits of their own, as did the winds, the rain and the storms.
Angels are the guardians of Order, the forces that oversee that the purpose of existence is indeed fulfilled.
Demons are the darker emotions, the destructive forces of creation. In primeval times the demons awoke alongside the gods and the angels, and were herded by the greater powers, chased into hell, even as the angels were led into heaven.