Demos are programs that generate multimedia presentations in real-time while demo is running. This separates demos from animations that are not limited with this real-time constraint.
In 64k intro competition these programs are limited in size to 64 kilobytes on 2003 PCs, Amigas, Macintosh computers, video game consoles and Java VM. 64 kilobytes is enough space to generate desired graphics and music algorithmically but doesn't enable usage of drawn graphics or recorded music.
