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Puranas say that these species are born from different wives of Maharshi Kashyapa.

Kashyapa + Danu = Danavas
Kashyapa + Diti = Daityas
Kashyapa + Krodhavasa = Pisachas

In Hymn 87 of the tenth mandala of the Rig Veda says that,

Brahma was asleep rakshasas are created by breath at the end of satya yuga.When they are created , they were filled with bloodlust , they started eating brahma himself.Brahma shouted "Rakshama!", Vishnu came to his aid, banishing to Earth all Rakshasas.

Also bhagavata purana 5.24.30 says that danavas and daityas live in rasathala .

But it's not clear,

  • What exactly are the differences among these species?
  • Who is more powerful?
  • What are their basic natures, cultures etc?

Couldn't get answer in this Related: Difference between Devas, Daevas, Asuras and Rakshasa

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1) DAITYAS (दैत्य)

Daityas are race of demons and Giants Living in Sutala (सुताल) one of the 14 lokas. they were greatly devoted to their deities followed Vedic rituals, undertook severe penance, and offered incredible offerings to Deties. Hiranyakashipu,
Sishupala, Virochana and Bali were some renowned daityas.

Daityas often Raise a war against the Devas and Distrubed their religious ceremonies. They often winning and the gods had to ask divine dispensation to get back power. The daityas cooperated with the gods in churning the ocean (समुद्र मंथन) to obtain the nectar from it, but the gods did not wish to share it with them. Rahu and Ketu (राहु-केतु)

Daityas showed resistance to spiritual forces, That way they show the opposing force required to maintain natural equilibrium and harmony. (Daityas are opposite to gods ). Daityas are demons in an adverse sense they are identical with asuras, They are antagonizing, blind forces in nature, expressed as reaction, opposition, and same as evil for some people they are good and bad for others.

2) Danavas (दानव)

Kashyapa is the forefather of Asuras Kashyapa's children born of Diti are called daityas. His children born of another wife Danu are Danavas. Collectively, Daityas and Danavas are called Asuras. They are half bothers of devas Some of the famous asuras are Bali, Banasura, Shambarasura, and Mahishasura.

3) Rakshsas (राक्षस)

According to leagend.. -

During creation, once Brahma felt very hungry and angry. From his anger originated two rakshasas called Heti and Praheti. They were very cruel and evil minded. They killed and ate lot many brahmins and cows. Heti married Bhaya, the daughter of Kala. A son called Vidyutkesa was born to them. His wife was Salakantaka. They abandoned a child born to them in the Himalayas who received the blessings of Shiva and Parvathy. This child was named Sukesha. He married the daughter of a gandharva called Devavati. They had three sons- Malyavan, Sumali and Mali. Through severe austerities they received the blessings of Brahma and became indefeatable. Thus they became very arrogant and cruel.They made Lanka their capital.

The Rakshasas multiplied in thousands -. e.g Ravana, Vibhishana, Kumbhakarna and Shurpanakha.

sources- Various sources

http://www.aryabhatt.com/astrology%20book/astrologyD.htm

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