Celestial Demons 「天魔族, Tenmazoku」 are what the humans (from the Eastern Empire) that have reincarnated into Angels are called. In other words, they are similar to Angels that have fallen into deprivation but are not quite the same as Fallen Angels. Similar to any being with some form of 'evil' alignment are called 'Mazoku' or 'Demonic-kin', since they are not 'pure' angels, they are also regarded as such. Basically, Angel-Monsters. They are the subordinates of Demon Lord Dino.
There is a language barrier here, since in Japanese, what we've read as 'angels' is 'tenshi' and this 'celestial demons' is actually pronounced 'enjeru' (angel) in Japanese itself. It wouldn't make sense to say that angels evolved into angels, hence 'Celestial Demons'.