(More specifically, the crappy, one track recording of that song, which then will "feed" the whole audio works that, at the other side of the pipe, will give a full fledged song ready for distribution).
Now I've refined the definition of demo by changing it to "Song that could be played LIVE".
I consider this definition an improvement because it contains the previous one in a more "organic" way (if you play a song live you play it from one extreme to the other), but also adds the purpose, the endgame (the song must be listened to by someone to become a song), and in addition it allows a playful headroom for experimentation; the application of the definition will be different for every song in the making; you cannot play live something that is too disgregated, but you can play, and it's always great fun, one of those songs where you're still not very sure of what happens at the bridge, so when you get there you "charm your way" into the next section...
In this way, some of my demos can reach the pipeline with 100% of the structure decided (well, it's never 100%), while in others I deliberately leave pending stuff that I consider better to decide in the heat of the moment.
That choosing when to wait or define, on its side, it's part of the musician's métier, the game of intuition wrestling with what you're trying to express, and always open to surprises of course... What the standards do is taking out of the way a lot of decissions, so you can focus on the "magic" part with all your might.