You're thinking of the actually powerful spirits, but those aren't the only ones around. The spirit courts are one thing, but household gods are another thing entirely. Spirits are totally your neighbors, just not the big ones. There's a spirit for everything, and if rando farmer can't leave an offering to a local field-god when he plows it, he's less of a god-fearing peasant and more of an incompetent fool. Now, if he's unfortunate enough to run into the Marchioness of the White Cedar Valleys he'll be in way over his head, but he can deal with the spirits of his hearth and fields reasonably well. They're small spirits, with small powers and small expectations. Anyone who flees from them in ignorant terror of "demons" is quite literally too stupid to live - as in, their inability to deal with spirits in any way will quickly lead to their demise. Now, actual demons - or at least the type of demons that sorcerers bother to summon, and therefore the ones that get stories told about them, are both more powerful and more alien, but distinguishing between powerful spirits and tiny harmless spirits is Basic Life Skills 101 in Creation.