In the mid 1900s, The Hell Gates were opened, connecting hell and earth. Demons believed it was their opportunity to roam the earth freely, wreaking havoc and evil but there was an unforeseen problem. With the two planes connected, the ethereal essence of the demons could not stand the filth humanity had dealt their planet. Demons didn't last too long with both atmospheres now diffusing into each other. Demons began dying off as a result of pollution. A solution was quickly found - with a human tether, demons could survive the polluted atmosphere. After much fighting, the leaderships of hell and earth finally met and an agreement was struck. Humans and demons could merge and live together. Having a human tether helped the demons survive and for the humans, they were privy to their possessing demon's powers.
This was how the world came to be as it now was in the mid 2000s; most humans were possessed by demons, a symbiotic relationship that granted "tethered" humans supernatural powers. They lived in harmony and used their powers to do as they pleased.
Yes, Hell and humanity had come to a mutually beneficial agreement but not everyone on either side was pleased with this arrangement.