These beings are much like humans in that they can be good, evil, or neutral. And like humans, the Jinn have free will. But one Jinn angered Allah by abusing this freedom of will when he refused to bow to Adam. Allah banished this Jinn from Paradise, and named him Satan. As a result of this, the Jinn are often considered demons.
In other versions of the Jinn story, the Jinn are not demons, but are a race unto themselves.
Humans cannot see Jinn, but the Jinn are able to possess humans, which also gives rise to the belief of Jinn as demons. Other version of the myth say Jinn are able to shapeshift and can take human and animal shapes.
One legend says that King Solomon had an artifact that allowed him to use the Jinn in battle. Another, perhaps more widely known legend, is that of Aladdin's Lamp. A Jinn was placed in this lamp, and was able to grant wishes to any human who came into possession of the lamp.
Personally... I prefer the idea of Jinn granting wishes. I mean, wish granting genies is so much more pleasant that invisible beings who may or may not be able to possess humans and may or may not be evil, amiright?!
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