Character settings:

Tengu: A crow spirit depicted as either a Diety or Demon in Japanese folklore.
Yamabushi: A mountain monk who is a follower of Tengu.
Japanese stranger: A living human who is likely a Yamabushi/Monk. He was able to furnish a modern-day passport to prove the validity of his stay in Korea. When confronted by police on his purpose for being in the mountain, he replied "Youko". Hence, he probably came to find Youko but got misled by an evil Tengu along the way. When controlled by the crow demon, he spreads disease by sexually assulting ladies in the village, who then spreads to other men. Infection can also spread by bite. Infected human murders family, becomes a lifeless shell and eventually dies from the diease. All victims' souls are taken via photographs as offering to the Demon.
Youko: Uncommon term for fox spirit in Japanese folklore. Similar to Tengu, can be depicted as a diety/diety assistant or demon. Often appears in female form or possesses living woman. In Korean folklore, it is known as a Kumiko and is only portrayed as an evil fox spirit.
Young woman: A Youko who recieves guidance and aids the Grandma (a Goddess) in helping the village. She probably possessed a living woman (as she is able to physically touch the police/rocks etc). Also, she is not powerful enough to directly hurt the Demon, with her abilities limited to observing the Monk, warning the police, setting up flower traps for the Demon and aiding Grandma in protecting innocent human from full take overs by Demon. As part of the spells, she probably needed belongings of the infected human beings.
Demon: Appears in various form depending on the believers' faith (e.g. Tengu, Devil). Does not have meat and bone, but gains full control of a suitable/weakened vessel when consume sufficient souls.
Sequence of events:

Under influence of evil Tengu, Monk rapes and infects Police daughter.
Police destroys Monk's ritual room, kills his dog and threatens to kill him if he does not leave in 3 days.
In response, Monk hangs dead goat to curse police family further (father paralyse momentarily, daughter went rabid and kills neighbour). He also proceeds to prepare a ritual to revieve zombie to protect himself/kill villagers.
A good/famous Shaman was brought in by police's mother.
Shaman removed Tengu's hidden crow curse and performs a high risk out-of-body hex to kill Monk. For a successful ritual, Shaman warns police there should be no interruption / visiter / drinking etc.
Although the hex is directed at the Demon, the daughter being under the control of the Demon, also suffers in pain and pleads for her father to stop the hex.
Monk almost died from the Shaman's hex but wakens when the police interrupted the ritual. The hex backfires, giving opportunity for Demon to leave the Monk and control Shaman instead.
Monk (now good) returns to his room to recuperate. Youko sees that he is no longer possessed, hence did not hurt him even though he is weakened.
Good Monk awakes and remembers that the zombie is revieved and may hurt people. He panicks and hurries to find it.
Fearing for his daughter's life, the Police went with his friends to the Monk's house to kill him.
Planning to make the villagers sin and lessen the village's protection from Grandma or Youko, the Demon contols the zombie to lure Monk back to his house to be killed by villagers.
Monk tries to escape the angry villagers but fell down a short cliff. He cries at the thought of his past sins and at the irony of his circumstance as his original intent was to save the villagers.
Monk sees Youko and chases after her. Being a fox spirit possessing a young woman, perhaps she fears of being captured/exocised by the good Monk, or she is accquinted with the Monk in the past and does not wish to reunite with him.
While chasing, Monk slips down clift and knocked against police's lorry.
Police and gang throws Monk over road's cliff.
Shaman (now bad) laughs as the Deman's plan to make the villagers sinners was successful, and that the Demon was able to fully take over the body of the dead/critically injured Monk.
Shaman returns to the Police house to collect the souls. However, Youko overpowers him.
Fearing for his life, he abandons his mission and flees home. The Crow Demon reminds Shaman that he has to work for him by blowing off the lited candle (no buddha can protect him) and sending a dead crow (death omen).
Shaman tries to flee the village, but the Demon sends moths to further instil fear in Shaman for the consequences in abandoning his task.
Shaman returns back to village (as seen on the road signage "Gokseong") and resumes his task by tricking the police that the young woman is the demon instead of the Monk.
As the policeman has sinned, the Youko and Grandma can no longer prevent the demon's complete take over of the daughter, nor the deaths of his family. However, Youko tries to trap the Demon and prevent the Shaman from collecting their souls. The trap will be successful if the police does not step past the flower trap after the rooster crows 3 times.
Unfortunately, the police's faith wavered when he saw Youko with the infected human being's belongings (including his daughter's hairpin), and he returned home to find that his daughter has murdered the whole family.
Shaman then came to take photo/collect souls.