In Cerulea, what we think is unreal, unproven, untrue is real, proven and true! That is how I am gonna start with the title of this discussion: Gods and Demons that Shape Cerulea.
I was thinking that the Cerulean gods and demons came from the same yoke (or is it ilk?). The only reason they are called gods and demons is because the former are either benevolent or plain indifferent towards the mortal beings of Cerulea, while the latter are malevolent and destructive and enjoy eating the souls of Ceruleans. Cerulea is their masterpiece, a result of eons of sacrifice and effort to build. Because one god did not like the idea of death for their living creations, a series of misunderstandings and unfortunate events proceeded to divide the holy host into two belligerent factions, namely the gods and the demons. For the sake of convenience, I'll just call this race of divine beings the Old Ones. They could be called anything in different realms by different people.
Physical appearance
The Old Ones defy description, because they were here before Cerulea was made, before there was time and space. They simply were. Why would they make life only to kill it, I will not answer. I am not here to preach about philosophy, because that is best left for your in-game characters to debate. I am here to tell a story, to describe a series of events. As such, the Old Ones are neither physical nor noncorporeal. When they appear before mortal creatures, they drape themselves in raiment to mimic life in Cerulea. So some appear humanoid, while others simply animal-like. However, one could immediately distinguish a god because of her extraordinary size and unique appearance and holy light, while a demon has a large size too and tormented flesh and evil presence. Others, wouldn't bother with a clothing, but simply appear in dreams. Stories and legends are abound of gods trapped in humanoid beings and forgot who they were, traveling Cerulea with their mysterious powers.
Divine hierarchy
Mayhaps the Old Ones are divided into the Great and the Lesser Gods. The Great ones are not very different from the Lesser, but only in size and power. Again, the Old Ones are not created, they just were. They came to being as such, and most are happy to be Great or Lesser, nor could they aspire to be better or worse. A duck can't be a swan. And the duck won't turn into a swan either by eating one. I hope you get my analogy ... The Lesser ones come in large numbers compared to the Great ones. I suppose every primary island in Cerulea has a Lesser god watching over it, sort of like a guardian angel. So the demons would run around and rampage every next village and town with failed harvests and diseases, what are the Great ones doing while the Lesser ones have to battle off demons in their respective island charges? The Great ones are busy gathering souls for the Final Battle at World's End! Yes, the Great ones, Gods and Demons alike, few and powerful as they are, would be kept busy managing and training dead heroes and champions, and inventing new artefacts for the Final Battle.
Religions
The Old Ones are mysterious beings. The Gods are even more so. They are like parents who would protect their children from too much information about reality. The Demons of course love to expose us children with too much information, and they are not afraid of telling the truth of things. See the catch? So the religions that centered on the worship of the Gods would be teaching about untrue stories, because the worshipers have come up with creative answers, and the Gods are not about to correct them, appearing before them in thunder and lightning. No, they just keep quiet, silently harvesting the souls of the faithful and the selfless. While the demonic religions are flooded with too much information, their worshipers are twisted and angry with everything; the Demons feed on such insanity and emotions.
Things are going to get more complex. The religions are varied, divided and difficult to agree with one another. Each religion or cult may center on the worship of a god or demon, and its worshipers may accuse the next religion's god a demon. So everyone's god is a demon to the next person. Whatsmore, some people think that their god is the only god (monotheism), while others worship two or three gods at once. In fact, the group of religions with the most number and mutually exclusive teachings belong to the Gods. The religions of the Demons are decidedly more agreeable with one another, because their stories about what really happened and will happen in the world matched with one another. The demonic religions are just not very popular because of virgin sacrifices. Haha!
So what do you think?