Most words drift into English over centuries. Pandemonium has a single author and a single date: John Milton, 1667.
In Paradise Lost, Satan and the rebel angels have just been thrown out of Heaven. At Mammon's suggestion, they build themselves a palace in Hell. The architect is Mulciber, who once designed palaces in Heaven and whom Milton identifies with the Roman god Vulcan. The fallen angels finish in hours what human builders would need ages to match. Milton calls the result Pandæmonium, "the high capital of Satan and his peers." In Book II, the great council of Hell meets inside it to plot their next move.
Milton assembled the name from Greek parts. Pan means "all." Daimonion means "little spirit" or "lesser divine power," and it reached Late Latin as daemonium, "evil spirit." Put together, the name means something like "all the demons," or the place where they all gather. It sits beside pantheon, the temple of all the gods, as its dark mirror image.
The Greek root is gentler than the English word demon suggests. A daimōn was a lesser god, and Etymonline traces it to a root meaning "divider" or "provider" of fortunes. Christian writers pushed the word toward "evil spirit," and Milton inherited that darker sense.
For about a century, the word stayed attached to Hell. Etymonline dates its first figurative use, "a place of uproar and disorder," to 1779. By 1865 it could mean the confusion itself rather than a place. Merriam-Webster traces the same slide: from Milton's capital, to Hell in general, to earthly dens of wickedness, and finally to any wild uproar.
That last step is the one that stuck. Today almost nobody who says a stadium erupted in pandemonium is thinking of fallen angels. The capital of Hell has become a crowd scene, and the capital letter has gone with it.
English does this with invented names more often than you might expect. A proper noun from one famous book becomes a common word once readers forget the book. Pandemonium is one of the clearest cases, because we know exactly who made it up and where.