Farastu (Tarry) Demodand, Kelubar (Slime) Demodand, Shator (Shaggy) Demodand.

The manifold planes of abysmal Tarterus are the only home of the
winged, tripartite race of demodands. Where these hideous monsters
dwell, even nycadaemons tread with circumspection, for demodands
are powerful, clever, and cruelly ruthless in their selfish evil. They are
formed into a feudal society of barons and commoners. On the Prime
Material Plane but a single demodand will be encountered, for these
creatures remain on the planes of Tarterus, the Abyss, or Hades unless
magically brought to some other plane, possibly as a guardian or
executioner.
The total number of demodands summoned by others of that type to a
given area can never exceed the number of the same type encounterable
on the Planes of Tarterus, i.e., 12, 10, or 8.

Quote:
Originally Posted by Gray Mouser
2) Can all demons and devil possess someone or only certain types (presumably the more powerful ones)?

It is up to the DM, but I'd say that those of 5th rank or above can attempt possession as if casting a magic jar spell.

Quote:
Originally Posted by Gray Mouser
3) Do you envision Daemons and Demodands having this ability, or is it limited to the creatures already mentioned?

No and yes.