We see in the demons and in Christ a mighty contrast: on the one hand, knowledge without charity standing in arrogance against it's Creator. On the other, humble submission to the Father which forms the foundation for true strength. When the former is what defines men we see a facade of knowledge covering true ignorance to the point where they do not even recognize their Creator when He appears among them. It is only the humility of Jesus that tears down this facade and replaces it with true knowledge built upon love.
The demons, for example, recognized who Jesus was without benefit to themselves. (I think Augustine mistakes what Satan was doing in the temptation of Christ: rather than trying to discover Jesus' true identity, He was trying to derail the new Adam just as he had done the old.) This is because when God reveals Himself to demonic powers, it is
not as to the holy angels, who know Him as the Word of God, and rejoice in His eternity, which they partake, but as was requisite to strike with terror the beings from whose tyranny He was going to free those who were predestined to His kingdom and the glory of it, eternally true and truly eternal. He made Himself known, therefore, to the demons, not by that which is life eternal, and the unchangeable light which illumines the pious, whose souls are cleansed by the faith that is in Him, but by some temporal effects of His power, and evidences of His mysterious presence, which were more easily discerned by the angelic senses even of wicked spirits than by human infirmity.When God reveals Himself to us it can be either with a saving revelation through the grace that leads to a broken heart and a contrite spirit, or by the common revelation which only piles up condemnation for the day of judgment.
When the angels have knowledge, it is a knowledge that is shaped by and founded upon love and which is tied directly into the Transcendent fount of Reason, the Logos Himself. When the demons have knowledge, it is to be sure greater than that of man, but still never more than a provincial self-knowledge that can make limited predictions concerning the near and immediate future (especially if they have a hand in making the predicted events come to pass--something which God occasionally permits).
This may be useful for us, since from time to time we'll have friends who are members of false religions that try to demonstrate the truth of that religion by means of spiritual revelation. When kept in the context of the other chapters in Book IX, we should see that the signs of demonic influence are attempting to produce a mediator between God and man other than Christ. Whether that mediator can predict the future or not is no sign of truth. Miraculous predictions, golden plates, precognitive children, bleeding statues, and all the other signs and wonders that come with such claims come from demonic powers if they attempt to place any person or being between the believer and God other than the Incarnate, Crucified, and Resurrected Christ.
Godly spiritual beings, on the other hand, "are not only eternal, but blessed. And the good wherein they are blessed is God, by whom they were created. For without end they enjoy the contemplation and participation of Him." Nothing stands between the blessed and God, there is no mediator filtering the contemplation and participation. This is the great truth of Christianity, you and I can have immediate access to Transcendent blessedness, because God Himself has become a man in the person of Jesus Christ. No other mediator is needed; indeed as Augustine has repeatedly shown in this book, none other is even possible.
The Bible uses the word "gods" in various ways, sometimes to describe demons, sometimes angels, sometimes the people of God. We should not get hung up on names (though we should probably not do what the Platonists do by calling the angels "demons", that's too challenging for us to get around as Christians). Whatever name we end up on, we should remember that all who live in fellowship with God exist not as mediators or intercessors, but as worshipers of God alone. Even the angels, who share both immortality and holiness with God (though possessing not the same of either as God) exist not to make us
As for those spirits who are good, and who are therefore not only immortal but also blessed... we shall, by God’s help, endeavor in the following book to show that these spirits, call them by what name, and ascribe to them what nature you will, desire that religious worship be paid to God alone, by whom they were created, and by whose communications of Himself to them they are blessed.Salvation and honor and glory belong to Jesus Christ alone, for salvation comes only through Him. Again and again the religions of the world will try to distract us by offering other intercessors or mediators, and yet Augustine is having none of that. Reconciliation with God is found through the intercession of Christ alone, as the catechism says:
Q. Why is the Son of God called Jesus,that is, Saviour?
A. Because he saves us from all our sins, and because salvation is not to be sought or found in anyone else
Q. Do those who seek their salvation or well-being in saints, in themselves, or anywhere else, also believe in the only Saviour Jesus?
A. No. Though they boast of him in words, they in fact deny the only Saviour Jesus. For one of two things must be true: either Jesus is not a complete Saviour, or those who by true faith accept this Saviour must find in him all that is necessary for their salvation.