I think adjusting the framing would help. Instead of thinking of them as "demon spawn", you could approach it with a more neutral framing, like attaching the origin concept from "abyss" or "void" that has some of the same denotations, but is less loaded in it's connotations.

Basically, I'd start just by looking at language concepts first.

"Ogre" has been swimming around in my head -- for being applied to many cultures' bogeymen and in particularly Oni from Japanese folklore -- but would that be too specific a term (even outside of Magic)? Ignoring the meme of Shrek, I feel like D&D and Tolkien-esque fantasy has built up a specific image of the "ogre" that I wouldn't want to invoke.

But let's say I do come up with another name to classify them as a whole (as opposed to specific tribe/nation names). Would it still be too on-the-nose to have them demonized by humanity? I know enough that fleshing out a full culture would avoid the main problem, but if they are then shown an an oppressed people, would that still be falling into an unintended trap?

Wouldn't it be easiest to just have them be demon people but have demon not be a necessarily bad thing? Maybe other people think that they're as bad as a reader might expect, but it's all propaganda. Or having horns is just not a big deal in your world- actually, there's a Pan/devil aspect you could play up there.

I think, in my tactic at least, it would be to demonize with a seed of truth. Have malefactors that play to the stereotype and become the most visible minority in the public perception. Obviously the majority won't deserve to be painted with the same brush, but have just enough of their ilk actually deserve that kind of reputation that it makes the public fear understandable, if hyperbolic and unjust.

I had a thought this past week about what to do with tieflings/oni/ogre/whatever-you-want-to-call-them, in terms of framing them as a peoples.

Basically, instead of shying away from the worry about accidentally being anti-Semitic, I thought I should lean all the way into it and have the physical markers (horns, brightly-colored skin, sometimes a tail, etc.) be the result of religious rites.

To explain it simply, tieflings would not be born as such, but instead the initiation rites -- equivalent to real-world initiation rites such as baptism -- to accept them into the religion would produce the changes, by way of it being magic and letting the spirits into their body or somesuch excuse. Many young children and even newborns would likely be brought into the religion as a matter of course -- like with Jewish bris -- before they can consent, but they would be born as their parents' race. Regional variations in the rites themselves would result in different prevalent physical changes -- i.e. some tieflings would be red-skinned with stubby horns while others would be blue-skinned with long thin horns despite them all being from the same religion.

I feel like this would make it easier to humanize them as a people, or at least I hope so.

A lot of pieces just fall into place if I accept it as true, too:

• It would be extremely obvious why they would be persecuted and discriminated against, because rather than just being "born different," they transform others into them
• This also moves the obvious and flat racism angle into one of religious persecution which is more befitting a Roman-style fantasy world
• Different sects of the religion could easily be explored as being at odds with one another, just as the Abrahamaic faiths have been doing for a few millennia, while being perceived as under one banner by outsiders
• Story possibilities easily open up about the duality of their religion (as most religions): of the community and family they foster on the one hand, and the more aggressive crusade-like religious zealotry it can produce on the other

Of course, I worry that framing it like that might make it more of a tightrope as it seems I'm literally painting devil horns on some certain religion (I'm not trying to here despite my distaste for organized religion). Maybe that won't be an obvious conclusion if I have a number of other religions developed alongside it for other people to worship, but I have yet to put that much thought into it. Am I being too cautious here, or is it a minefield best left undisturbed?