Is Medusa a demon in Greek mythology?

A Greek daemon is not the same as a "demon"; a daemon is divinely born.

Medusa was born of the ancinet sea gods Phorkys (who presided over the hidden dangers of the deep)and Keto (a goddess of whales, large sharks, and sea-monsters) who were born of the primeval deities Pontus (sea) and Gaea (earth).