Some Vaishnava authors use word "demigod" in their books to refer to the gods that are not identical with the Supreme Lord (Supreme God) which is Lord Krishna (also known as Narayana, Rama, Balarama, Ananta, Vishnu, Vasudeva, Nrisimha, Sankarshana, Matsya, Kurma, Madhusudana, Varaha, etc) per the Vaishnava understanding of the vedic knowledge.
There is nothing wrong with the word "demigod". Thus "demigod" just means "a god who is not the Supreme Lord Krishna, but is just a partial manifestation of Lord Krishna", and thus those gods that are demigods are subordinate to Lord Krishna. Actually all those demigods are servants of Lord Krishna, and are subordinate to Him.
You can see usage of that word in the books of the Gaudiya vaishnava authors such as at the vedabase: http://www.vedabase.com/
Yes, we can say that the demigods are Ganapathi, Hanuman, Kartikeya, and gods in heaven such as Indra (the king of heaven), Vayu (god of wind), Varuna (god of waters), Rudra (destroyer of the universe), Brahma (creator of the universe), Yama (god of death), Agni (god of fire), etc.
The worship of the demigods is not bad, but is not the best thing you can do in life either, because they can not give you moksha or liberation from the cycle of birth and death called samsara. But Lord Krishna can give you moksha, and so to devote ourselves to Him is much, much better than to worship of any of the demigods.
The worship of the demigods is much encouraged in the Vedas such as in the Rig Veda. I talked about it at http://chat.stackexchange.com/transcript/message/28943582#28943582