In my *main* story, the primary villain is a physically manifested demonic overlord. Much of my questioning is on that point.

In this world, the spiritual world has much more directly physical consequence, demons and angels both manifest quite regularly. (Although the angels do so much less often, because their primary objectives still must be carried out in the spiritual.)

In this world Satan has ordered that a physical conquest be attempted. This is my first question: is that a remotely feasible concept? I mean, would demons consider this a satisfactory form of conquest?

The other problem is a problem of power. I'm operating under the assumption that when the demon manifests his physical form, he imbues it with enough power that, when he is eventually severed from his physical form, he doesn't have enough power to physically manifest again, reduced to the least of demons. Are there any problems in there?

This demon also controls several "shapes", which are illusions of humans, able to interact with matter, but only existing as manifestations of the demon's will. I'm assuming that spirits have enough mental power to control several such people at once. It will be clear that the demon is not omni-present, but only mentally in a few places at once.

I'm handling some deep spiritual ideas here, and I don't want to take them likely.

I think those ideas are perfectly plausible, and very good. I have a very similar cobha in Ithelak, as a matter of fact (though not enough to get either of us worried).

Demons would love to dethrone God as the head of the nations, if they saw Him as such. They would also love to control, enslave, or even slaughter the whole human race. So incarnate war seems like a likely plan were they able to do it.

It sounds great to me. My main villain is also a physical demon. He is not inhabiting a host body, but instead he shifted his form into a physical from.

I think the idea of demons conquering physically is perfectly feasible. If the demons took over, they could put the people in poverty and unending torture, so even though it is a physical conquest, it is also a conquest on their minds.