Where is the best place for demon hunting? (kill 100,000 demons achievement)

Act 4, Quest 1.

When you fight Iskatu, there will be lots of these tiny black demons. Just take some Thorns equipment and start the game there on Normal. Let them hit you, kill em with thorns, restart.

Each time there are approximately 350 of these demons

Most of Act IV consists of Demon classified creatures. The suggestion to farm Act IV Quest I is appropriate, however you should probably use Blackthorn's set to gain immunity from Molten or have sufficient health regeneration to accommodate it being layered on you while you stand still (if simply afk farming the demons).

I propose however that you run all of Act IV or run Act IV bounties to complete this achievement since you will also gain the Act IV caches which may contain a ring of royal grandeur (which is why people farm Act I caches).

You're certain to gain a number of levels, gems, etc with this method as opposed to the mindless farming which requires nearly 300 game resets (based on 350 small demons).

If you can pull this off in Torment 1 efficiently you should also be able to simultaneously farm a number of keys towards your Hellfire crafting requirements.