This is a complicated question, but also an important one, and since people have been discussing it, let's break it down a little bit. The unhelpful answer is 'it varies;' I've mentioned this before, but a lot of people will say 'Demonic' and just use it as a synonym for 'Unorthodox.' Even a lot of people who make a distinction in that regard tend to be pretty vague about it, either going the route of 'I know it when I see it' or using detailed but more complex than they're implying methods like 'Corrupted Qi' and such. If you actually want to break it down, however, the best way to think of it is as a scale. Orthodox to Unorthodox is one axis, Demonic to ??? (we'll come back to this) is the other.
To simplify the vast spectrum of human morality down to a simple graph, you could think of it in terms of D&D alignments, if that helps you grok it--in which case, Orthodox to Unorthodox is the Lawful to Chaotic divide. Orthodox Sects, broadly speaking, follow the rules*, believe in the power of society and the group, and respect hierarchy. As an extension of that, they also believe in honor, tradition, and things like trust--of doing favors and repaying them, cooperating long term, etc. The Unorthodox Sects, well, don't, or at least not in the same ways; clearly they exist as a society in their own right and thus abide by some of the expectations thereof, but where most of the Orthodox Sects fundamentally agree on the broad picture of how things should be, if not the details, the Unorthodox Sects don't and so the details and specifics of a Sect can vary a lot from one to the next. Some Unorthodox Sects place a lot of value on bloodlines, for example, and others don't care about that at all.
However, it needs to be reiterated, at least in theory, that this is the divide between Lawful and Chaotic, not Good and Evil. I talked before about how the Wuxia/Xianxia stock trope of an Orthodox Sect that turns out to be corrupt, hypocritical, and evil is such an old take that is, um, basically the original take, and at the same time, the interpretation of an Unorthodox Sect that's been decried by the Wulin as savage, murderous, and cruel demonstrating itself to be loyal and heroic is just as old, because it often occurred in the same stories. Jin Yong and Gu Long both did, so it's just carved into the genre.
Often, this ties into the reason why a group might be Unorthodox. For example, the Five Poison Cult in Sword Stained with Royal Blood is made out of a persecuted minority group that's on-board with overthrowing the current Emperor for the reasons you'd probably expect. The Ming Cult tried to overthrow the (Mongol-led) Yuan Dynasty, deeming it corrupt and cruel and wishing to restore order, and nobody really understood where it was coming from because it was overly secretive and avoided other Sects, but it's goals were to help people.
'Demonic,' then, means Evil on this scale, and an Unorthodox Sect can be Demonic, but doesn't have to be.
...Which sounds great, but here's the thing. It's all well and good to talk about the world in shades of grey, but if you break out Microsoft Paint or whatever and play around with the color filters a bit, you might notice grey can go black pretty, regardless of what the technical label says. The connotations made between Unorthodox and Demonic aren't unjustified--hell, even in Jin Yong's work, where the Ming Cult started out trying to help the people of China, it's heavily implied that they became the Sun and Moon Holy Cult, because when the Chinese characters for Sun and Moon are combined, they form the character for Ming, and they seemed to have inherited a lot of their techniques. And in The Smiling, Proud Wanderer, those guys end up being allies to the MC, but like...they ain't great people, you know?
But on the other hand, the same can be true of the Orthodox Sects, they just usually don't get the same label, the reason being that they tend to be more willing to play ball. Take, for example, the Emei Sect. The reason you often see or hear of the Emei Sect being up to some shit is because...well, once again, that was the original take. In Jin Yong's works, the Emei Sect was founded by a Buddhist Nun...or rather, a woman who was a Buddhist Nun at that point. See, the woman in question was Guo Xiang, the daughter of the main couple of the Legend of Condor Heroes. After pretty much her entire family dies, she wanders the land beating ass and earns a reputation big enough to be called the Little Eastern Heretic, after her maternal grandfather, the Eastern Heretic, before settling down in her forties to establish the Emei Sect.
As you might expect from that, the Emei Sect has an interesting history. Their most famous name is Zhou Zhirou, but even before the Nine Yin Manuel came into play, it needs to be mentioned that the Sect's official style still includes the Thirty-Six Styles of Death Touch, yes, really. When Zhirou's master really, really hated Zhang Wuji for being associated with the Unorthodox Ming Cult, Zhirou definitely does some murdering to make ends meet, but, like, even before that, the entire Sect were
really big fans of Fist of the North Star.
But the thing is, even when they choose to be evil, they tend to be
Lawful Evil. Zhirou 'murdered' Yin Li and framed Zhao Min, and after Zhao Min interrupted her wedding and her husband to be sided with her, pretended to marry the heir of the Wudang Sect and teaches him some secret heart exploding moves to have him help kill her enemies, and beats everyone up in the Tenkaichi Budokai Tournament the Shaolin Temple happened to be holding that week to get acknowledged as the champion of Wulin, but like...she still fundamentally wanted to be part of the system, from the Orthodox perspective. Not to say everyone was fine with what she was doing or anything, but throughout all of that, Zhirou's fundamental goal was preserving her Sect (in addition to some vengeance, admittedly), so stuff and things. People tend to be like 'Yo, maybe don't stand up that Emei Sect girl at the alter; they historically don't react well to it and the Sect teaches a technique called the Five Point Palm Exploding Heart Technique. Also, on that note, I can't believe we're having this conversation, because even your mama warned you about those Emei Sect girls.' But they still get invited to parties.
Here's the thing, though; if Demonic Sects are the 'Evil' side on this diagram, what's 'Good'? And the answer is...there kind of isn't one. Like, 'Saint' or 'Holy' is the technical answer, but you don't really get Holy Sects except maybe in flattery, you just get a Saint. Because 99% of the time, the scale runs from Evil to Neutral in Cultivator Land--and honestly, a lot of the time in real life. You'll get your Heroes, make no mistake, but Good is a rare qualifier in this regard, because most people aren't necessarily drawn to the temptations of evil, but also aren't necessarily driven to act by the sight of those in need, beyond what's immediately possible or convenient.
Now, that's a mean way of saying it, because in fact, a lot of Sects, Cultivators, and Immortals do good deeds. They protect areas, help people, stand up for what they believe in, and so on. But it does need to be mentioned, at least in passing, that a lot of this is done from a position of power, or at least equal footing. That's not nothing by any means, but the number of Cultivators that are willing to stand up and fight to protect people when they're outnumbered and outgunned is in the minority, like it usually is. When you're a Level 10 Fighter, you probably feel pretty damn good about yourself and are happy to help out your town and village when goblins attack or whatever, but when you hear Asmodeus just broke through in the neighboring kingdom and conquered it--well, like, what do you want
me to do about it? It's fucking
Asmodeus. Yeah, sure, it's bad that he's shoving all those people into his torture pits, but what the fuck? This is not a Level appropriate encounter, bro. Where's Elminster at?
So while on the surface, the distinction tends to get made that Unorthodox Sects believe in power over all else, and the Orthodox Sects don't, that's mostly just sorta kinda true. Orthodox Sects
do believe in society, tradition, honor, trust, and so on, but, well...they're not necessarily gonna argue with you about it if you're twice as strong as they are, you know?
On the other side of things, it also needs to be mentioned that while they can be motivated by sheer lust for power, a lot of Unorthodox Sects actually start for political reasons. It's been mentioned, at least in passing, that part of the reason cities are so spread out is because they didn't originally all belong to the same country--the Sacred Lotus Kingdom expanded before, during, and after the Great War, just like the other major nations. Similarly, a lot of decisions get made with thought to the powerful Sects first and the people on the ground maybe not at all, and there are periodically conflicts that just wreck swaths of territory, and so on. And if you're a mortal that's upset about this, well, tough luck, nobody gives a shit about what you have to say because you don't have power**. How do you get power? Become a Cultivator--but then you're just joining the pack, becoming part of the system, and starting way, way behind. How do you fix that? Well, it just so happens there's this forbidden technique here that can give you power in a hurry...
It doesn't always go like that, but it can easily go like that, because this world is not kind to the powerless and the fastest ways to
get power involve taking it from someone else. And the number of Sect that can hold onto their ideals while surrounded by atrocities and other monsters, on the outskirts of civilization, while the main cities reject them as monsters and the years roll by is pretty slim, especially when other Sects are happy to use them and throw them away to get ahead in their own goals. By the time those Sects are old and established enough to try and push for the change they originally wanted, it's questionable if the ones who pushed for those changes would even be alive anymore, much less in charge.
And so it goes.
As for the Censors, they're firm disciples of the
Way of Sir Humphrey Appleby.)
*Not necessarily the
government's rules, but the rules of their society.
**This is hyperbolic, of course; people may or may not give a shit about what you have to say, depending on where, when, and how you say. Nonetheless, it's really hard to effectuate change as a mortal in an Immortal-run society.