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Daemon
A daemon is a process that runs without input from the user or output to the user directly. They are referred to as "Services" on Microsoft Windows computers.
The word 'daemon' comes from the Greek word, which refers to a spirit the silently performs basic tasks for a higher power. It was named by the programers of MIT's Project MAC after Maxwell's Demon, a creature in a thought experiment that sorts molecules.
Pronunciation
The word is not pronounced 'demon'. Remember your vowel rules: when two vowels go walking, the first one does the talking. Thus, 'ae' makes a long A sound. The correct pronunciation is 'day-mon'. 'Die-mon' is also technically correct, but don't be that autistic. Try pronouncing it now. Don't worry, as long as you closed the basement door your mother can't hear you.