Demons are incorporate, malicious spirits from the depths of hell. They require a human form in order to pass into the mortal realm. A dark sorcerer can sacrifice an individual in order to trap a demon in the victims body, enslaving the spirit to their will. This is a risky process that can come back to harm the user if the demon isn't bound correctly. 

Ancient runes and sigils must be carved into a living victim's skin. This will bind the demon to the body, trapping it and subjecting it to the sorcerer's will. Then the victim is killed through a dark ritual. The organs are removed from the body, as well as the bones, cartilage, etc, until only the skin is left. It is then placed over a ritual circle, while the sorcerer chants an ancient incantation that opens the gates to the netherworld. The circle provides the passageway, splitting the ground and allowing the demon to inhabit the skin of the victim. The runes keep the demon in the skin of the victim, trapping it similar to a prison.

Since demons are just bodiless spirits, why would a victim's insides have to be removed in order for the demon to possess them?
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Because they have to be removed.

This is a magic system that you're creating. By definition, the rules are also yours to define. 

**Why do you need a ritual circle?** 

Because demons only arrive via ritual circle.

**Why do victims have to be hollowed out like a pumpkin?** 

Because when they tried it on someone who still had their insides, their spleen exploded, killing the victim and three practitioners.

**Why can't we at least keep their skin on? Flaying someone is messy work.** 

Because when a victim had their skin on, the demon couldn't secure a foothold inside them and was dragged back to the nether regions, and a bunch of expensive reagents were wasted.
Evolved Protection
===================

Since demons are real it can be assume that they existed throughout our evolution. 

It could be that back in time (a little after primordial soup, when skin evolved) that demons could at will take over any organic being. They did this because while they were in control they would feast on the victims organs (if not feast then they would get some other benefit derived from organs). Skin was an evolutionary defensive response against this (Those that could not get possessed had a better chance of surviving). 

Now since skin is our shield against demons, it could also be used to trap them. The reason why everything else is removed is simply so that the demon has nothing to feast on and get stronger (could get strong enough to break the sigils).