Before I start defining the difference between angels and demons, it is important that I go into the mythical history of these spiritual beings. Keep in mind that although this history is mythical, it is very ancient and no one has ever come up with a better explanation of how three separate orders of spirits (angels, demons and the souls of humans) came into being in the first place. I present this history to explain just why human souls outrank even the angels in God’s Hierarchy.
The “standard” mythology goes something like this: Prior to the creation of the material universe, God created an army of angelic helpers. These were God’s first attempt to create sentient (thinking) beings, analogous to a first release of a software program; a sort of “Spirit 1.0”. All of these beings were created to do His bidding, each with a specific job to perform. Each one had their own form of intelligence and the ability to make decisions based on their defined tasks, but since they were all designed to perform specific functions, their degree of free will to act outside of their assigned tasks was fairly limited. Their most important impulse was a burning desire to serve their creator.
The only exception to this was a special angel named Lucifer who God created as an angel with high intelligence, free will and ambition. He created Lucifer with these attributes because He wanted a companion more like Himself to help Him to manage His creation. He was God’s second in command.
Unfortunately, this first attempt at spiritual creation made for a static heaven. It produced a heaven that could not progress in knowledge and wisdom. Even Lucifer was not up to the task. He was, after all, only one of God’s angels. He did not possess God’s great intelligence or intuition, and he couldn’t be trusted to make all the divine decisions on his own. He was, for all intents and purposes, just a heavenly bureaucrat. However, God wanted to grow, and the heaven he had created was too static to help him in this endeavor. His wisdom could penetrate down throughout the ranks of his angelic host, but lacking a high degree of free will, his angelic host was unable to contribute to His store of wisdom.
Because their free will is limited, angelic beings naturally tend to organize themselves in structured organizations similar to armies with various ranks subordinate to higher ranks, and each angel subordinate to superior angels, all, of course, subordinate to God. Each angel has a fair amount of latitude and a degree of free will in the performance of the tasks assigned to it. But having only limited free will, if an angel were asked by a superior to act outside of its defined specialty, it would need the permission and guidance of superior angels.
Thus we read about the various angelic “choirs” starting at the top with Seraphim, Cherubim and Thrones down through the ranks to Archangels and finally to ordinary angels. Each angel has its own function but they are all motivated exclusively by God’s desires and have few desires of their own. In other words, none of them tend to “think outside of the box” and cannot evolve spiritually because each one was created perfectly to perform its tasks in the first place. Angels cannot evolve!
God wanted new challenges and new horizons, and his army of angels simply could not provide the spiritual evolution that God craved. Thus began God’s quest to create spiritual beings that DID possess the ability to act on their own. I suspect that by observing Lucifer, his second in command, He realized how dangerous this new experiment could be, so He assigned His angels to create a material universe, completely isolated from his spiritual domain. This would function as a quarantined laboratory to confine and provide limits to the behavior of his new creations. Thus, the material universe with all of its stars, quasars, black holes and planets came into being.
When He began to create his new living beings, He presumably went through a number of “hardware” iterations in his laboratory starting with proto-bacteria and plant life, progressing through numerous low-level organisms, into vertebrates that had limited intelligence. None of these creatures were particularly rewarding since their behaviors were all strictly defined by their specific environments and instinctual behaviors. These early attempts could be labeled Spirit 1.01, 1.02…etc.
Ultimately, He arrived at a species that could actually think in abstract terms. We can call the souls of human beings “Spirit 2.0”. Human souls were full-fledged spiritual beings with the divine properties of abstract reasoning and free will. Furthermore, their confinement in a material universe kept the spiritual realm protected from the unpredictability that all this free will naturally produced, while at the same time allowing each individual soul full freedom to evolve spiritually in any way he or she chose within the limits imposed by their material container.
Therefore, human beings actually outrank the angels. Only humans can evolve spiritually. Only humans can return to God with “value-added”. ALL other angelic beings, both angels and demons, function as mere bureaucrats designed to help in the creation and maintenance of a material world where human beings can learn the basics of spiritual evolution.