I feel like my beloved Tolkien. He spoke of Elves and the furthest thing from his mind was pointy-eared humans. Likewise, I speak of demons and I do not mean spirit beings that carry pitchforks. So when you see me write "demon" abandon all your previously conceived images and think instead of something like a LOTR movie orc. That is the flesh form of a fire-wrought demon, the most common kind of demon in the Red World.

Let's start with demon basics... where do they come from?
Demon's are created out of nothing. They are sub-human humanoid forms given intelligence to whatever level the creator desires. However, they are classified into various fashionings, coordinated with the elements: earth, fire, water, air, and darkness. The armies are typically composed of demons of fire fashioning.

Now for the next question, what in the world does the term "flesh form" have to do with anything? In the Red World all beings have three essential parts, flesh, spirit, and shadow. For each of the various races these are arranged in varying degrees of proximity to each other. For example, dragons are very close to their spirit while their shadow is very distant. For men the combination varies depending on actions more than it does for other species. For demons, their parts are so distant they can only maintain one at a time, the flesh form being the easiest, and the shadow form the next easiest. I don't think there are any spirit demons on record.

It remains then to categorize each of the fashionings and their characteristics. Note: after creation, all demons have a maturing period before they can function. This is detailed under each demon kind below.

Fire: In flesh form these demons appear much like LOTR movie orcs, only somewhat less nasty. These guys aren't oozing out blood, don't have half-opened skulls, usually have both their eyes, etc. Think of a humanoid shape with grey skin, probably not much hair, and even less intelligence. Their bones are made pretty cheap, too. In shadow form these appear like a flaming skeleton, though not necessarily with a human skull. Maturing period is generall short, less than a day.

Water, Earth, Air: These crafts were never learned well by demons, and thus the fashioning of demons in these crafts virtually never happened.

Darkness: Them most powerful demon kind. I doubt there are more than twelve of these on record. It is difficult to tell whether these are in flesh or shadow form, but there power remains unparalleled in either form, so it doesn't really matter. Maturing period varies depending on the power of the demon created, anywhere from a few days to years. Nastar, who was a hybrid of fire and darkness fashionings, took hundreds of years to fully mature.

I am sure I will later remember stuff I forgot to post here, but before my chronicles talk more about demons I thought I would post this here.

They are only tied to fire spiritually. The only way in which they are affiliated with fire is that they are created in flames (to ease the creating) and the fire craft is used to make them.

The five elements are naturally Fire, Earth, Water, Air, and Star (the term for Light). The demons, however, could never get anywhere with Star, and in their attempts to mimic its abilities essentially reversed it (reverse-engineered in a way). This is also true of the vaeances (in the Bestiary), who attempted to mimic the elements but got Star backward also.

Who fashioned them? This is probably one of the best ideas on the forum! I love the different forms and the elements of fashioning. Would all the demons be evil or just have a tendency toward evil like the valences.

Demons can be "fashioned" by anyone of sufficient power and will, but only by evil magic, so that is why the protagonists don't run around building armies of them. The first to fashion demons was probably Aerykun, The Dark One, and since then it has been practiced by all sorts of demon lords and other evil beings.

As to their moral tendencies, they do tend toward evil. They do this, however, because the fashioner can decide just how intelligent each demon he fashions will be, so most the time evil is ingrained into them from the moment of their fashioning. Two demon lords have been known to actively work for the good side, and they have fought amongst themselves sometimes. No more than a few hundred demons in all of history have ever been considered good or righteous though.

Is there any limit to the amount of demons created, or is it just infinite? Do the demons just follow there master blindly or might they turn against him? Can they only reproduce through magic or are they able to sustain a population on their own?

Demon creation is limitless. They can keep being made as long as their is power to make them.

Most demons, such as those that make up the armies, are build with such limited intelligence that they can't imagine turning away on their own. Often it is ingrained into them that they serve their creator. However, if the evil side wants to fashion a very powerful demon, one with large magic capabilities, leadership capacities, problem solving, etc, they have to be given a little more intelligence and free will in the process. Only two demon lords have ever turned traitor, and one of them brought a following with him. I suppose those demons followed him because he was able to make them realize his was the better side, or for more practical reasons such as survival.

Typically demons don't live long enough for reproduction to be a question. They are usually expended in battles or labor. I can say with certainty that more demons have been fashioned than have been born. I have never considered demons reproducing by any biological means. I am pretty sure they are genderless, but are just referred to with male pronouns. That is something I would have to work on if I ever were to delve deep into how demon nations and societies work.