A shorthand for the two words, "Dark Ego", a Daego is a demon-like magical beast that emerges when someone afflicted with Daego's Curse reaches a critical level of distress and hopelessness. The process creates the power crystal somewhere in their body that causes the transformation. At the outset of the story it is unknown if Daego's are actually demonic, or simply mirror them in as a perversion of humanity.
Daego's Curse, the first stage of becoming a daego, is diagnosed when a person suddenly becomes unable to fully utilize their talents as an individual- this is not related to any kind of disability per se, as a disabled person may still possess many gifts of intellect or creativity.
The Daego, or Dark Ego, is the manifestation of the person's seeming inability to fully connect to others and appreciate the gifts the god of light has bestowed upon them.