They are the wingless counterparts of the Flying Demons.
Book of Gallowmere entry
Some of the most evil, murderous critters ever to blight on the land! Thankfully, they were locked away in a hermetically sealed vaults by a great hero hundreds of years ago. Don't worry! We're safe! Only a complete fool would ever set them free.
Oh... please tell me you didn't?!
A hundred years ago, these dark, evil-looking creatures were imprisoned inside the tomb located in the Enchanted Earth. Daniel is forced to release them in order to progress on his journey. They make their way to the ruins of Peregrin Castle after their release, where they imprison three farmers. Daniel eventually kills all the demons by releasing the lava held by the castle's floodgates.
- In The Haunted Ruins level, during Dan's mission to save the farmers, there are three Shadow Demons to slay in MediEvil (both the original PS1 version and PS4 remake), while there is only one demon in Resurrection.