They know God's awesome power, and they, unlike man, tremble! Maybe a better English word would be shudder. They recognize His power and are terrified at the thought of God. They are thoroughly convicted that God is!
This verse helps us to understand that saving faith is not the intellectual acceptance of a theological proposition, that is, that God is, but rather a belief that expresses itself outwardly in a changed life. The demons believe. They tremble in fear, but they will not obey God. We, too, can believe that God is—we can give intellectual assent to a theological proposition: "Yes I believe that God is." But we may not even shudder, and most assuredly, most of mankind will not submit.
The faith that saves is one that not only believes that God is, but also changes a person's life according to that belief. That is saving faith. If we believe that God is, that puts us only on the same level as the demons.
John W. Ritenbaugh
Satan (Part 1)