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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> 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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I don't know mate, that's non traditional lore and totally on you. Which sort of makes this question "opinion based" and closeable. 

But if you are asking for a mythologically justifiable reason that could be tied to this then perhaps:

1) **(logically) preservation-** skin aka leather lasts a whole lot longer if removed from more decomposable flesh. Afterall you want your demon slave sticking around for a good long time. 

2) The Egyptians believed **the heart** was the seat of the soul, since the soul prevents possession then removing the heart is critical. 

3) **Temptation** - Physical appearance leads to raw impure carnal sexual attraction which leads to sin. By this logic the skin could be the only organ inherently unholy enough to support the demon. It also justifies self flagellation as a means of penance.
### Demons are corporeal on Earth

Demons may be incorporate in the netherworld, but on Earth they must be corporeal. After all, every creature with a will on the Earth is corporeal. Ghosts? Those are just stories.

If a demon comes through the portal from the netherworld, then its essence takes a corporeal form on this side of the portal, just as if a wizard wishes to go into the netherworld, his corporeal body cannot enter and only his astral projection will pass through.

### Demon's corporeal forms on Earth is ... messy

While you and I and horses and trees are made of the normal stuff of Earth, (Fire, Earth, Air and Water) demons are ... not. Their corporeal forms are made of all sorts of impossible magical elements. Not only would they drive humans to gibbering insanity by just looking at them, but their unstable bodies interact in strange ways with the environment. Just try touching them with iron, for example, and see what happens. 

In order to contain a demon's form on Earth, it must be covered with something, and something that was once alive, at that. The skin of a creature, imbued with the proper magical rituals, can both allow a demon to take a set form on Earth, and contain their magical power to prevent unfortunate reactions. 

### To do useful work on Earth, Demons needs a 'covering' to put over their forms

What better way than human skin? This gives several advantages, not least that the demon is molded into a human form and can do human work and interact with humans. After all, succubi would be very inefficient if they were trapped in the skin of a cow. Plus, one advantage of a skin suit is that a perfectly normal looking human can suddenly pull back his face, revealing his true form, and rendering anyone who sees him mad. 

Demons don't *have* to be trapped in a human form, of course, you can make some sort of vessel for the demon, known as a familiar. But, generally, humans and small animals are the only demon-summoning recipes you will find in musty old tomes, which explains why you don't see many demon rhinos.