Question
You have heard of the term daemon when it refers to a process, service or listener of an OS. Where did this term come from?
Solution
According to page 440 of A Practical Guide to Fedora and RedHat Enterprise Linux by Sobell, the terms daemon, service and server are all interchangeable. Demons are invisible presences like spirits. The term "daemon" is Latin and is pronounced exactly the same as "demon" according to Dictionary.com.
To read more elaborate definitions of the word, see this Webopedia posting or this Whatis.com definition.
There are discrepant etymologies for the word. This term was chosen in the early stages of computing. The term may be a backronym/portmanteau for "Disk And Execution MONitor" (according to page 1245 of A Practical Guide to Fedora and RedHat Enterprise Linux by Sobell). Linfo.org says that the term "daemon" denotes something that is not necessarily evil which is contradistincted from the term "demon."
A different published book has a different explanation of the word's origin.
The term daemon was first coined by MIT hackers in the 1960s. It refers to a molecule-sorting demon from an 1867 thought experiment, Maxwell's demon is a being with the supernatural ability to effortlessly perform difficult tasks, apparently violating the second law of thermodynamics. Similarly, in Linux, system daemons tirelessly perform tasks such as providing SSH service and keeping system logs.
Page 321 of Hacking the Art of Exploitation, 2nd Edition.