This needs some serious world building, i.e how the competely separated human and demon world can be at war, or why Fried was surprised about the fact, that it's possible to enter the demon world (seems like this piece of information wasn't known prior, or maybe lost over the years). If they just recently (re)learned how to get to the demon world, did the demons have this information prior to this human invasion and used it to invade to human world? If neither humans nor demons knew previously, than how could there even be war?
My take on how Fried could reincarnate as the new demon lord is due to his timely death after the demon lord's ressurection spell started and his close enough positioning caused demon lord's soul and Fried's body to merge. I'd really like to see some kind of inner dialogue between the 2 in later chapters when Maou's soul, let's say, "awakens", but for now Fried only gained the powers.