Dream gods children (recent chapters lore spoilers theory)
In the recent chapters we learned that every realm is just the corpse of a dead god. They don't have bodies or soul cores, they used avatars and almost everyone currently alive is a child of the war god.
We know that the dream realm is the dream gods realm and he's consuming the other gods corpse's but we've never seen a single piece of land the was confirmed to be the dream gods body. We know that's because he was locked behind the veil.
I think the deamons were his avatars. When he was sealed he lost control of them and they developed their own personalities.
The body of the dream God that's behind the veil probably had a bunch of people living in it who went with him and are now corrupted like the mad prince was. We might soon discover that the dream God is dead too and the last arc could be against the corrupt inhabitants of the dream gods body with a few mortals who reached divine rank.
Could be proven wrong in tomorrow's chapters but it's fun to think about. I love lore chapters.
Edit: I'm adding to this after reading a comment. Weaver definitely killed the gods and the deamons since we know the didn't kill each other
"You have inherited a part of Weaver's forbidden lineage. Your bones have been altered and imbued with steadfast temperance. When children of the -unknown- rebelled against the gods, Weaver was the only one to refuse the call of war. Despised and hunted by both sides, they disappeared. No one knew where Weaver went and what they did… until it was too late."