It's really mostly unknown what his role is. I know he appears in the manga as early as the last page of Vol.1 (much earlier than the anime) but I don't know his role yet since I can't read Japanese.
I don't think the Demon is a god in the RM world. All-knowing, yes. Omnipresent? In the n-Fields, possibly. All-powerful? No. He had to take a human form (as Shirosaki) to influence Jun. He also influenced (i.e., manipulated) Enju and therefore Barasuishou.
As for the doll's having no free will, that's almost halfway correct through most of the series. They are all inevitably headed towards the Alice Game. Every doll knew and expected it, and they always had. In that way their fate was sealed. In the meantime, though, they had the free will to do as they pleased. When an unstable element (Jun) is introduced, seeds of dissention are planted.
After Shinku defeats Suigintou, the pain she feels causes her to become a pacifist. Suiseiseki admits to Souseiseki that she'd rather be defeated without a fight than be forced to fight her Sister dolls that she loves.
It's all kinda complicated if you think about in in this way... Anyways...