Demons are called Tatari Gami in Japanese. It means cursed gods, but it infests all creatures, even humans.
Demon Worms are red/black maggot-like creatures that emerge from gods turning into demons. They don't appear to have any eyes but it does appear they have mouthes in some parts.
Lady Eboshi uses toxic cannon ammos and Jigos tracker uses the poison, too. The poison weaken the flesh, which affect the mind of its host. Then the victim looses the control of itself and turn in to a demon with hateness only in mind.
Ashitaka is infest with the poison after fighting Nago. But he doesn't become a demon. Instead he is granted with power, which eats his lifespan. It shows that the host must really hate something to become a demon.
When the demon touch the ground, the plants instantly died.
There is no known cure beside the blood of the Forest Spirit. After the spirit die off Ashitaka is cured from it.
Two characters become demon:
Three more characters are infest by it: