Demon powers are evil and chaotic powers from Hell itself. They instantly make good people evil if they grab hold. Not much else is known about them however, but they are stronger than Neko and Fox powers, and Angel powers are the only known way to fully combat Demon powers.
Ways to Activate or Acquire them
How to activate them is unknown, but you can get them from someone else by either stealing them or that person willingly granting some power to you. An example of both of these is Alloin and Bitch-sama.
What Constitutes Demon Powers
So far Demon powers have not been shown to have magical transformations outside of Bitch-Sama's Demon Cat God transformation from the official movie.
It may be that Demon powers have the chance to permanently alter an individual's appearance, as Bitch-chan looks radically different compared to when she didn't have Demon powers.
It's also possible that Demon powers give you the ability to steal the powers of others, as shown in Sugoi Quest for Kokoro THE MOVIE.