The villagers thought his strange actions were caused by being demon-possessed.

demon-possessed 是由名词 demon（恶魔、恶灵）和形容词 possessed（被附身的）组成的复合形容词。possessed 来自动词 possess（拥有、控制），加上 -ed 表示被动状态，指"被某种灵体控制或附身"的状态。 demon-possessed 整体意思是"被恶魔附身的"，用来形容人被邪恶灵体控制的状态。