Re: Not to beat a deceased equine into the ground . . .
*nod* Fantasy uses the word "demon" with little understanding. The original Greek daemon was simply a spirit, and that's an entirely different concept from a Christian "demon." It's a perfectly natural spirit with its just place in nature, no matter how dangerous and destructive it can be, whereas the Christian demon is an evil fallen angel and should not exist at all. I, also, got the impression Chaos is really an entity with a job to do. A crucial job.
How Hojo trapped such a powerful being and what he thought it was, we may never know.