A daemon is a process that runs in background, without a link to a GUI or terminal. Daemons are usually started at system boot, and stay alive until the system shuts down. In more recent technical writings, daemons are often refered to as services. Unix daemons are not to be confused with demons. Evi Nemeth, co-author of the UNIX System Administration Handbook has the following to say about daemons:
Many people equate the word “daemon” with the word “demon“, implying some kind of satanic connection between UNIX and the underworld. This is an egregious misunderstanding. “Daemon” is actually a much older form of “demon“; daemons have no particular bias towards good or evil, but rather serve to help define a person’s character or personality. The ancient Greeks’ concept of a “personal daemon” was similar to the modern concept of a “guardian angel”.
(page 130, Linux System Administration, by Paul Cobbaut)