Paul is saying, "Look, brethren, you have contact with and guidance from God. Why settle for demons?" Looking back into chapter one, we ought to see clearly why Paul wrote what he did: He was establishing the greatness of Christ as contrasted to demons.
John W. Ritenbaugh
The Covenants, Grace, and Law (Part 21)
In verse 8, the word translated as "basic principles of the world" refers to elementary things. Compared to Christ, in terms of being, every other being is lesser because he or she is created. In terms of teaching, every other instruction is elementary, basic, even demonic. In terms of salvation, no other is able to save human beings.
In verses 9-10, Paul again emphasizes Christ's primacy and superiority, including the facts that He is divine and over demons in authority. He adds in verses 11-15 that, for Christians, Jesus has already defeated the principalities and powers, along with their purposes, through their conversion.
As Colossians 1:16 states, Christ's rank extends back to the very beginning, as the One used to create all things. Thus, He is the God (John 1:1) referred to in nearly every place in the Old Testament where God is mentioned. This is especially important to grasp.
John 14:10 aids us in understanding His operations as a man: "Do you not believe that I am in the Father, and the Father in Me? The words that I speak to you I do not speak on My own authority; but the Father who dwells in Me does the works." Matthew 26:52-53 clarifies this through an example: "But Jesus said to him, 'Put your sword in its place, for all who take the sword will perish by the sword. Or do you think that I cannot now pray to My Father, and He will provide Me with more than twelve legions of angels?'"
While He was human, His power as a God-Being was suspended as part of His emptying Himself to become a man (Philippians 2:5-8). He thus operated on the same level as all other men, except for the innate power He possessed due to His divine nature, enabling Him to live by faith sinlessly. Better than all other men, He understood the purpose God is working out, and He believed it. Notice to whom He said He could turn in time of need.
John W. Ritenbaugh
Power Belongs to God (Part Two)
At every turn, it seems, the main object of Gnosticism was to twist the nature of Christ. Some Gnostics believed that Jesus was a man, but that Christ entered into Jesus when He was baptized and left Him right before He died. Other Gnostics believed that Jesus did not really die - because, after all, if He died, then He was not really God. Others believed that He could not have been perfect and sinless because He created matter, which Gnostics believed to be evil. And there were also those who believed that Jesus Christ was a created being - an idea that is still affecting the fringes of the church of God today.
So if we want to counter Gnosticism, we must begin with the truth of Jesus Christ. Paul emphasizes this in verses 9-10: Jesus was the fullness of the divine nature in bodily form, and He is the head, the leader, the sovereign, of every principality and power. Though the Gnostics in their various views always twisted or denied some aspect of the nature and role of Jesus Christ, these truths brought out by the apostle are bedrock beliefs for true Christians.
Also foundational to countering Gnosticism is the truth that Jesus brought. To combat the false knowledge that threatens to plunder our spiritual riches, we must take the Bible as the complete and inspired Word of God, against which we can test any concept, tradition, doctrine, or philosophy, no matter how good it sounds on the surface. Gnostics would not readily accept the Bible as God's inspired revelation, or if they did, they also held that other ancient, secret writings were on par with Scripture, and could be trusted to provide greater insight.
In addition, Gnostics were also avid proponents of "progressive revelation," the belief that God is continuing to reveal His will to mankind, but with the implication that Holy Scripture is not as important as hearing directly from the spirit world. Thus, some today, while not entirely rejecting the Bible, believe that "God" is personally revealing things to them - things which often contradict what He has already given to mankind in the His written Word.
David C. Grabbe
Whatever Happened to Gnosticism? Part Two: Defining Gnosticism
Other Forerunner Commentary entries containing Colossians 2:10: