Is it possible for demons to be good people in your setting?

Not really, though it isnt uncommon to have aligning interests

>demons
>literally defined as the embodiment of evil as a concept
>good people

Wew lad.

Fiend-blooded mortals and other such hybrids can be, though. They just tend to act like their parents/ancestors.

>literally defined as the embodiment of evil as a concept
Citation?

I mean, that's the traditional definition of fiends, and I've always stuck with it.

Defined where?

Demons in my setting are some kind of proto humans: the gods created them at first, thousands of years later created the humans (that resembled them in most aspects but the magic aptitude, greater in demons).
Humans cohabitated with the demons for a long time, but they were almost always enslaving humans through their superior power, so the gods decided to move them to another dimension.
The demons didn't like this, of course, and have since then been trying to conquer the world of humans.
Tl;dr: They are not bad people; it is only that only a few see humans as little more than cattle.

Demons are allegorical representations of evil. They make no sense as good people unless the metaphor is changed from evil to a nation of generally evil people. But then that causes an infinite regress. Because you'll always need some kind of allegorical representation of evil and then you'll just need something else for that.

(OP)
To expand. This is like asking if you can redeem Rumplestiltskin or the Big Bad Wolf. It's a fairy tale, the characters are deliberately flat and one dimensional.

yes. They're more lawful than anything, really, and even then there are still chaotic ones, because newsflash: even the most perfect systems will have outliers and defective models, whether it's a manufacturing line or a demon dimension.

I thought the traditional definition is that they were angels that disagreed with god, and thus got sent to a plane where god wasn't.

And then someone wrote fanfiction about how the boring godless plain was actually full of suffering and evil, and this fanfiction became popular.