Who thought Pearl might be a demon child? Why?

From the text:

She remembered—betwixt a smile and a shudder—the talk of the neighbouring townspeople, who, seeking vainly elsewhere for the child's paternity, and observing some of her odd attributes, had given out that poor little Pearl was a demon offspring: such as, ever since old Catholic times, had occasionally been seen on earth, through the agency of their mother's sin, and to promote some foul and wicked purpose.