Inu yōkai (犬妖怪), or dog demons in the English dub, are humanoid shape-shifter demons with characteristics of dogs. All known dog demons are incredibly powerful. Although they spend most of their time in human-like forms, they have the ability to revert to their true forms, those of giant dogs.
Inu yōkai are one of the most powerful species of yōkai seen in the series. They possess a a wide array of powers and abilities and all pure blooded dog yōkai shown are Daiyōkai, the strongest type of demon there is. Inuyasha is half-human, but even he possesses great strength beyond those of average yōkai. Inu Yōkai's most prominent skill is their ability to take on human forms which allows for easier interaction with humans and smaller demons. They have incredibly long lifespans and are immune to all forms of diseases and strong purification powers which may be fatal to regular demons. They can master a variety of magical and mystical abilities, such as creating acid, generating lightning, flight, teleportation, psychic powers and strong yōki. Like regular dogs, they have heightened senses, most notably scent. They also have superhuman strength, speed, durability and reflexes which make them excellent fighters. Powerful swords can also be forged from their fangs which possess incredible power beyond those of any ordinary blade; Sesshōmaru has also shown that he has the ability to create a powerful blade from his own body.
It is highly likely that dog demons in the InuYasha series are actually based off of the tiangou (天狗, "heavenly dog"), a black dog that lived in the sky and was an enemy of Zhang Xian, a Chinese male deity of child birth. Zhang Xian protected male infants from the tiangou by shooting arrows into the sky. Depictions of Xian and the tiangou strongly resemble an artistic flashback that occurred while Myōga told Kagome about Tōga, depicting the Dog General flying into the sky and archers firing arrows at him from below. Similar to the tiangou, pure-blooded dog demons are able to transform into colossal dogs and fly through the air. Sesshōmaru's mother even lives in a castle in the sky, enhancing the parallels. In Japan, the tiangou is known as tengu, and is depicted as a winged priest-like demon with a long nose. Despite retaining the kanji for dog (狗) in their name, tengu do not have any similarities with dogs, demonstrating bird-like characteristics instead. Therefore, dog demons in the series seem to rest on Chinese, rather than Japanese, myth.