Not posting on whether or not this is a thing, because I’m pretty sure it is, though I’m open to people debating how much this is a thing. I’m more in need of assistance in tracing where the (sub)genre derived.
Broad definition: Fantasy (meaning speculative fiction about things that probably can’t happen) in which the main speculative element is that demonic and/or infernal beings exist in the world.
Probably more specifically: Dark Fantasy subgenre in which the Fantasy “Five Races” trope (Wizards, Elves, Men, Dwarves, Halfling) is subverted and humans openly live amongst various infernal races such as demons or imps.
Possibly crosses over with: Dark Fantasy, Grimdark, Horror, High Fantasy, Paranormal, Mythic/Chthonic Fantasy, Paranormal Romance…
Probably distinguished by: more likely fictional or secondary world than Paranormal, Historical, or some Urban Fantasy; not necessarily as fright-reliant as Horror, not as reliant on human protagonists as Paranormal, not as reliant as demons as intrusive as Paranormal or Spiritual, not as necessarily romantic as Paranormal Romance.
Possible influences or precursors: Chthonic Myth, Christian Demonology lore, RPG games, ‘Souls’ series of video games, Buffyverse, The Mortal Instruments, The Dark Days Club, The Black Jewels…Lucifer?
I feel I’m missing some (what should be obvious) influence for the amount of this I see on Wattpad. It’s possible there’s an influential Wattpad work that I’m not familiar with that some of these follow. Of course, yes, it’s possible authors all independently build their worlds using the same pre-existing elements of Fantasy and demons in general. Maybe there’s an influential anime series somewhere?
I’m sure this is a thing though. I did a search on #darkfantasy tag and a lot of the descriptions of resulting works indicate demonic elements as opposed to Elves or Vampires or races that would have been popular at other times.