Hi, Joe —
This is discerned in the exorcism process. The Church knows by many years of experience certain things that accompany demonic possession.
For example, if someone has knowledge that they couldn't possibly naturally have, or fluently speaks a language they have never studied and couldn't possibly know by natural means, those are good signs you are dealing with demonic possession. Objects levitating in the person's presence or an extreme aversion for holy and blessed objects are other clues. Some possessed people are able to distinguish between a consecrated communion host and an unconsecrated one. Sometimes strange objects will materialize inside the person. Sometimes a person's voice will change and become guttural; a woman, say, will speak with the voice of a man. Superhuman strength is another clue. Less dramatically, during an exorcism, the priest knows how demons behave and can recognize their behavior if he is well-trained.
Typically, the Church will first look to psychiatrists to rule out mental illness. If the psychiatrist cannot explain what's going on, the exorcist will look more closely at diabolical possession.
Eric
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