Demihuman is a term adopted into the /tg/ lexicon from Advanced Dungeons & Dragons. Prior to 3rd edition, it was a term used in-game to refer to humanoid races - well, specifically, "demihuman" referred to the elf, dwarf, gnome and halfling races, whilst other races, such as orcs, goblinoids, kobolds, xvarts, ogres and so forth were all lumped together as "humanoids".
With the release of 3rd edition, this term was dropped from the official D&D lexicon, suspected to be due to worries over its hidden assumptions; using "demihuman" to refer to playable humanoids could be taken to imply that 1) all civilized/nonevil humanoid races are related to humans, and 2) those races are somehow inferior to "real" humans, while "humanoids" are shittier still. Note that neither of these assumptions are at all true in most D&D settings, despite what most editions' crunch would have you believe.
Still, the term does occasionally pop up; aside from the obvious nostalgia appeal, the plain truth of the matter is that "demihuman" is a simple shorthand way of referencing all of the "traditionally non-evil humanoid races" with a single word. And what fa/tg/uy is opposed to the idea of having a shorthand name to call something, really?