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Islam recognizes the existence of the jinn, which are sentient beings with free will that can co-exist with humans and are not all evil as demons are described in Christianity. The creation of Jinnkind preceded that of mankind. They exist in what is known as the Al-Ghaib (unseen or unknown) realm or world, they have the ability to see us but we can not see them. Angels also exist in this realm, as well as the human soul (hence why it can not be seen leaving the human body in death). The Jinns are made from the smokeless flame of fire and both angels and the human soul are made from light, whilst the human body is made from clay. This "fire" and "light" is beyond matter, however what ever exists in this realm is made from matter. In Islam, the evil Jinns are referred to as the shayātīn, or devils, and Iblis (Satan) is their chief. Iblis one of the first Jinn (he is not considered an Angel in Islamic Cultures) who disobeyed Allah (God) and did not bow down before Adam.
According to the Qur'an, when Allah (God) created Adam from clay, all the angels and Iblis himself was ordered to bow before Adam as humans are superior to any of Allah's (God's) other creations. Iblis became very jealous and said that humans are not the superior creations but jinns are as they are made of fire and humans are made of clay and he disobeyed Allah (God).
Adam was the first prophet and deputy of the human race, and as such was the greatest creation of Allah (God). Iblis could not stand this, and refused to acknowledge a creature made of "clay" (matter). Allah (God), thus, condemned Iblis to be punished in the hellfire. But Iblis asked for respite until the last day to which Allah's (God) agreed, but warned that he and all who would follow him in evil would be punished in hell. Allah (God) also stated that Iblis would only be able to mislead those who have forsaken Allah (God) and not the righteous believers.
Adam and Eve (Hawwa in Arabic) were both together misled by Iblis into eating the forbidden fruit, and consequently fell from the garden of Eden (allegorical) into a state of degeneration.
Jinns are not the "genies" of modern lore. Like man, there are good and bad, believers and non-believers amongst them. The evil Jinns have been known to possess human beings or enter a humans life in order to hinder it. Its actions would be that of a poltergeist in western understanding. Contrary to the evil Jinn, the good Jinns are muslim (servants of good) and can enter a human life in order to help them in numerous ways. The entry to our realm is forbidden without Allah (God's) permission. Both the Angels and Jinns can enter in the form of a human being or an animal. As Angles do not posses free will and the good Jinn are obedient, they never enter without Allah's (God's) permission. However, the same can not be said for the evil Jinn who enter as they will and have been known to take the form of many animals (esp black Dogs and Snakes) and human beings.
Shaitan (شیطان) is the equivalent of Satan in Islam. While Shaitan (شیطان, from the root šṭn شطن) is an adjective (meaning "astray" or "distant", sometimes translated as "devil") that is applied only to Jinn, Iblis (Arabic pronunciation: [ˈibliːs]) is the personal name of the Devil who is mentioned in the Qur'anic account of Genesis. According to the Qur'an, Iblis (the Arabic name used) disobeyed an order from Allah to bow to Adam and as a result was forced out of heaven and given respite until the day of judgment from further punishment.
When Allah commanded all of the angels to bow down before Adam (the first Human), Iblis, full of hubris and jealousy, refused to obey God's command (he could do so because he had free will), seeing Adam as being inferior in creation due to his being created from clay as compared to him (created of fire).
It is We Who created you and gave you shape; then We bade the angels prostrate to Adam, and they prostrate; not so Iblis (Lucifer); He refused to be of those who prostrate."
- (Allah) said: "What prevented thee from prostrating when I commanded thee?" He said: "I am better than he: Thou didst create me from fire, and him from clay.
- Qur'an 7:11-12
It was after this that the title of "Shaitan" was given, which can be roughly translated as "Enemy," "Rebel," "Evil" or "Devil". Shaitan then claims that if the punishment for his act of disobedience is to be delayed until the Day of Judgment, that he will divert many of Adam's own descendants from the straight path during his period of respite. God accepts the claims of Iblis and guarantees recompense to Iblis and his followers in the form of Hellfire. In order to test mankind and jinn alike, Allah allowed Iblis to roam the earth to attempt to convert others away from his path. He was sent to earth along with Adam and Eve, after eventually luring them into eating the fruit from the forbidden tree.
Jinn (Arabic: جن jinn, singular جنی jinnī; variant spelling djinn) or genies are supernatural creatures in Arab folklore and Islamic teachings which occupy a parallel world to that of mankind. Together, jinn, humans and angels make up the three sentient creations of Allah. According to the Qur’ān, there are two creations that have free will: humans and jinn. Religious sources say barely anything about them; however, the Qur’an mentions that jinn are made of smokeless flame or "the fire of a scorching wind". Like human beings, the jinn can also be good, evil, or neutrally benevolent.
The jinn are mentioned frequently in the Qur’an, and there is a surah entitled Sūrat al-Jinn in the Quran