In the fantasy world of The Demons Are Planning Something Good, the demon race sustains itself on the negative emotions produced by humans. Lord Mercysnare, a high-ranking demon within the Demon Lord's army, has a very specific interest in this dynamic. He craves the magical power that is generated when humans experience humiliation and embarrassment, and he has determined that the most efficient way to harvest this energy is through cleverly designed traps and schemes. To that end, he leads a department dedicated to the research and development of new methods to harass, disorient, and degrade the human adventurers who dare to invade the Demon Lord's domain.

The narrative centers on the daily operations of this R&D division, portraying the demons not as malevolent villains but as overworked, highly specialized researchers who take their craft very seriously. The traps they devise are drawn directly from classic erotic fantasy tropes, such as slime that dissolves only clothing, tentacles that bind in suggestive ways, cursed armor that shrinks, and barriers that can only be bypassed through lewd acts. The humor arises from the contrast between the absurdly sexual nature of these inventions and the deadpan, professional attitude with which the demons discuss their development and deployment. Each chapter presents a new "project" or challenge, showcasing a different trap or strategy and the logistical and creative thinking behind it.

The primary characters include Lord Mercysnare, the passionate and visionary department head who is constantly brainstorming new fields of humiliation to explore. His assistant, Letze, is a more grounded and often exasperated figure who must manage the practical realities of her boss's wild ideas, handle paperwork, and deal with the unexpected consequences of their experiments. Letze also has a mysterious and complicated past that occasionally resurfaces to disrupt the castle's routine. Other recurring figures include members of different demonic departments, such as a shape-shifting team, a brainwashing division, and an alteration corps, each contributing their own specialty to the army's overall mission.

As the series progresses, the narrative expands beyond simple one-off experiments. Later arcs introduce more involved scenarios, such as rival adventuring parties who become recurring obstacles, the introduction of a daunting barrier that requires a specific kind of lewd magic to break, and internal conflicts within the demon ranks. A notable ongoing thread involves Letze being forced to confront elements of her personal history, and the development of the adventurer Merisha, who becomes a key figure in the humans' attempts to counter the demons' schemes. Through it all, the series maintains its core conceit: a workplace comedy about dedicated demonic civil servants who are absolutely committed to perfecting the art of embarrassing their enemies.