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Actually, by the way he is worded, there is no 'cost-benefit' relationship between the discards. His ability says 'you must' discard a demon and then that 'you may' discard heroes. There is no "to" for there to be an actual link between any cost and benefit.Now, the ruling in the past (not made by Elders that I can find?) is that the play-as for this card shows that it is a cost-benefit. However, there is no errata for this card. Play-as are not the same as errata, they were intended to give more modern wording for older cards. If they change the card, then they do not actually apply. Only an errata can change a card.Should it be a cost-benefit? Probably yes, that is a silly ability otherwise. However, as it currently stands, it is not. Can we get some Elder input on this? If there is an errata, can we add it to the list?
So...The demon possession in a territory is not a requirement.