Demons are "parasitic" creatures of the movie Princess Mononoke. The Demon Worms were animated by Haru Matsuda.
Demons are called Tatari Gami in Japanese. It means "cursed gods", but it infests all creatures, even humans.
Demon Worms are red/black, maggot-like creatures resembling congealed blood that emerge en masse from gods turning into demons. They lack visible eyes, but appear to have a mouth similar to that of a leech or lamprey. After the demon is killed, their flesh rapidly melts away, leaving only bone.
Lady Eboshi uses toxic cannon ammunition and Jigo's tracker uses the poison, too. The poison weakens the flesh, which affects the mind of its host. Then the victim loses control of itself and turns into a demon with hateness only in mind. As the victim goes mad, demons and the worms are created.
Ashitaka is infected and marked after fighting Nago, but strangely doesn't become a demon. Instead, he is granted with power, which eats at his lifespan when used. In order for one to become a demon, they must already harbor hatred in their heart, which Ashitaka did not. As Ashitaka continually uses his power, the black growths cover his skin, showing the progression of the disease.
Plants, however, cannot become hosts for demons, and instead instantly die on contact.
There is no known cure besides the blood of the Forest Spirit, and intervention must happen before the full demonization or death of the victim. Clean water is known to temporarily alleviate the effects of the curse. Ashitaka and San are cured of their affliction upon being engulfed by the Forest Spirit when returning its' severed head. It is unknown if a 'true' demon such as Nago can be cured.
Two characters become demons:
Three more characters are infested by it: