A more academic entry here would be nice. The information below seems to be slightly...biased.

In Western tradition a familiar spirit, commonly called familiar (from Middle English 'familiar', related to family) is a minor demon who obeys a witch, conjurer, etc., and serves and helps that person. Familiars often perform domestic duties and help in farming, but also aid the person in bewitching people. These spirits are also said to be able of inspiring artists and writers (compare with muses).

The familiar is given to the conjurer by another demon, higher in status, with whom the person has made a pact or, in other cases, having been the demon compelled by the conjurer.

There is no standard depiction of a familiar, but they are commonly considered to be dwarf and ugly.

'Give no regard to mediums and familiar spirits; do not seek after them, to be defiled by them: I am the LORD your God. Leviticus 19:31

'And the person who turns to mediums and familiar spirits, to prostitute himself with them, I will set My face against that person and cut him off from his people. Leviticus 20:16

Familiar spirit" is the designation of a specific type of evil spirit. It is so classified because of its chief characteristic: namely, familiarity. It is a relationship, a familiarity, with a person or personality. For example, a woman, whom Paul encountered in Macedonia, had a familiar spirit which gave her powers of divination and Paul dealt with it. God’s word is true:

Now it happened, as we went to prayer, that a certain slave girl possessed with a spirit of divination met us, who brought her masters much profit by fortune-telling. This girl followed Paul and us, and cried out, saying, "These men are the servants of the Most High God, who proclaim to us the way of salvation." And this she did for many days. But Paul, greatly annoyed, turned and said to the spirit, "I command you in the name of Jesus Christ to come out of her." And he came out that very hour. Acts 16:16-18

Familiar spirits are common amid the practices of spiritism and witchcraft, but their activity is by no means limited to persons and practices so obviously occult. Evil spirits are personalities. They can reason, decide, express emotions and communicate. Personalities have the capacity to relate to one another. Two human personalities can form a relationship; and, through communication and communion, that relationship can be enhanced. Likewise, a person can form and develop a close relationship with an evil spirit. When a person forms a relationship with an evil spirit (which can be done either willfully or through ignorance), he then has a familiar spirit.

Communication is the chief characteristic of a familiar spirit. The spirit responds quickly to the summons of the medium. A medium, such as the witch of Endor whom Saul consulted (I Sam. 28:7), is a go-between which forms a communication link between the earthly world and the demonic realm. Thus, anyone who becomes a channel of communication for an evil spirit is a medium. He has a familiar spirit. A familiar spirit is something that a person has, because it is a personality identified with a certain individual. In the same sense that one has a book, a friend or a cold, one can be personally identified with a demon spirit. When a person yields to a familiar spirit he becomes a medium for the spirit to speak through her/him! But what many of God’s people are not aware that there are many sincere Christian folks who are unknowingly yield to familiar spirit who cause them to say and do foolish things and even prophesy things that come from a familiar spirit, not God. Under "the anointing" on a TV program on 12/31/89 Healing Evangelist Benny Hinn made several prophecies of things the Lord was showing him were to take place in the 1990s: "The Spirit of God tells me an earthquake will hit the east coast of America and destroy much in the 90s." "The Spirit tells me Fidel Castro will die in the 90's. . . Oooh! Holy Spirit just said to me it'll be worse than any death you can imagine." "The Lord also tells me to tell you in the mid-90s -- about '94 or '95, no later than that -- God will destroy the homosexual community of America . . . He will destroy it with fire." As a matter of fact none of Benny Hinn’s prophecies have come to pass because Benny Hinn doesn’t have discernment of the gift of discerning of spirits (1 Corinthians 12:10). It’s a fact that familiar and unclean spirit plays all kinds of games with many Christians and they don’t discern what is going on!

Deception is one of the great tools of the devil that he uses on all people including Christians. Deception is always present in one's relationship with a familiar spirit. Usually, the one having a familiar spirit believes that his spirit-companion is good rather than evil, or thinks that something beneficial will come out of that relationship. He erroneously believes that the spirit is a true benefactor who will provide him with helpful information. He may even believe that the familiar spirit is the Holy Spirit. He will; therefore, be reluctant to part with something he believes is beneficial or that is of God. The person having a familiar spirit may not recognize that it is a spirit entity with whom he is having a relationship. He may think that his experiences are only within his imaginations and fantasies. Or, he may believe that he has contacted God's spiritual realm through his mind rather than through his spirit. Thus, he may be ensnared, not because he is seeking something evil, but because he is seeking something good in a wrong way. A familiar spirit can also work within a person giving them the impression that a god or God is talking to them or even making them believe that they have lived past lives.

Necromancy, a supposed communication with the dead, is a facet of the familiar spirit's operation. Necromancy is an outright deception. Rather than communicating with a particular person, the medium is in contact with a spirit which is familiar with that dead person. The spirit is able to give information and produce manifestations which lead the necromancer to suppose that he has contacted the spirit of a certain dead person.

There are many avenues through which familiar spirits can be acquired.

1) Divination -Through divination, an attempt to discern future events or to discover that which cannot be known by normal methods, a familiar spirit is sought to assist a person in his quest for hidden knowledge, guidance and power. There are many expressions of divination. Divination includes the practices of occultists, spiritist mediums, witches, Haitian voodoo priests, American medicine men and Siberian shamans and the Ouija Board.

2) Transcendental Meditation -Through Transcendental Meditation passive meditation coupled with trance-producing techniques and the chanting of a mantra, opens a person directly to the demonic realm. In his attempt to discover true enlightenment, the TM practitioner empties himself of all self-identity and will-power. He opens himself to deceiving spirits who impersonate Deity and divulge false revelations of secret and hidden mysteries. It is not unusual to find a child who has an imaginary playmate.

3) Imaginary Playmates - The invisible companion is very real to the child. In fact, the playmate may be invisible to others but appear visibly to the child. The imaginary playmate becomes a companion and a teacher of the child. What begins, in the child's imagination, as a technique to offset loneliness, evolves into a relationship with a familiar spirit which brings about a change in the child's personality and behavior.

4) Visualization - Visualization is a method used for centuries by sorcerers to contact demonic powers. Visualization which is a counterfeit of faith is an attempt to see, by the function of the natural mind, that which can only be seen by the spiritual eye of faith. Faith has spiritual eyes which enable one to see the invisible. "Faith is the evidence of things not seen" Heb. 11:1.

5) Drugs - Drugs, especially the hallucinatory drugs, provide a straight corridor into the demonic realm. This is true of all sorts of drugs ranging from the ancient peyote to modern drugs known as LSD and PCP. Such drugs alter the function of brain cells, and pave the way for an infinite variety of supposed revelations which are fostered by familiar spirits that were contacted via the drug-induced hallucinations.

6) Necromancy - God's Word clearly forbids communication with spirits of the dead. "There shall not be found among you anyone who...calls up the dead" Deut. 18:10,11. Some, whose loved ones have died, are tempted to communicate with them. Instead of contacting the spirit of their loved ones, they come into contact with familiar spirits who impersonate deceased friends or relatives. Sometimes, displayed pictures of deceased parents, brothers, sisters, grandparents or other dead persons can attract familiar spirits. At one time, a friend of ours kept pictures of her deceased parents and other family members in our bedroom. It gave her a sense of their continued presence in her life. The Holy Spirit convicted her that her dead parents were not her source of comfort, security or help. The pictures were put away. There are some people; however, who have been taught to pray to Mary, the mother of Jesus, or to other departed saints, as mediators. When men pray to the spirits of the dead, they are practicing necromancy and courting familiar spirits. Therefore, it is easy to understand why there are so many reported visitations by these forbidden mediators. For example, there is the "Virgin of Guadalupe" and the "Virgin of Medjugore", because familiar spirits manifested themselves when people prayed to Mary, the mother of Jesus.

7) Games and toys and rock music - Games and toys and music are a powerful influence in the training of children but the devil has used many of these things to introduce them to or seduce them by familiar spirits and people get influence by them without knowing it. They develop quirks and behavior patters that become part of their personality. A five-year-old-boy, was emotionally attached to the hideous looking little creature known as E.T., an extra-terrestrial being. E.T. had ceased to be a mere fictional character in this young boy's experience. E.T. had become a living companion and friend who visited his bedroom and talked with him. He was conversing with a demon: a familiar spirit. In such ways the devil is conditioning children to relate to demons as friends. The child becomes accustomed to these demonic creatures to the extent that he is even comfortable with them when they materialize. Tom, a young man in his late teens, was controlled by a false personality. The alter ego was acquired through his involvement with the game "Dungeons & Dragons." The game requires role playing, and the player becomes totally identified with a fictional character. Often, the players dress in identifying costumes which portray the character they are to represent. Tom had gradually lost his own identity and had taken on the identity of his familiar spirit. God’s word is unchanging:

Now the Spirit expressly says that in latter times some will depart from the faith, giving heed to deceiving spirits and doctrines of demons, 1 Timothy 4:1

8) Great Crisis – When a person goes through a devastating situation like a loss of a family member, a loss of a job, a loss of a home or a loss of other things, he or she becomes very wounded and open to the operations of familiar spirits who come in through the disguise of sympathy, wishful thinking or a suggestion such as committing suicide!

Yes, unclean familiar spirits are found to have been acquired through sexual promiscuity. Fornication, adultery, pornography and any sort of sexual deviation will give opportunity to spirits of sexual lust. Some familiar spirits come to people when they are sleeping and interact with them through vivid sexual dreams or fantasies to carry out different evil and wicked desires for the mind is a gateway the enemy uses to influence many people. God’s word is unchanging:

And you He made alive, who were dead in trespasses and sins, in which you once walked according to the course of this world, according to the prince of the power of the air, the spirit who now works in the sons of disobedience, among whom also we all once conducted ourselves in the lusts of our flesh, fulfilling the desires of the flesh and of the mind, and were by nature children of wrath, just as the others. Ephesians 2:1-3

Yes God’s people need to repent and renounce all familiar spirits that have entered their lives through whatever means possible and be delivered from all the lies and deceptions of familiar spirits. Here is a suggested prayer.

Lord Jesus, I belong to You. You have saved me and redeemed me by Your blood. I have need of no spirit other than The Holy Spirit. Forgive me for having sought from other spirits that which should only come from You. I renounce and separate myself from all familiar spirits, however acquired. I call upon You, Lord, to deliver me from the lies and deceptions of familiar spirits. Teach me Your truth and Your ways. It is my earnest desire to walk in Your will and to glorify Your name. Amen.

Satan, I renounce you, and I take back all the ground that I ever yielded to you. God is my source of wisdom, knowledge, guidance and power. You familiar spirit, leave me, in the name of Jesus.

Thank you Lord Jesus for delivering me and cleansing me from all unrighteousness by Your precious blood. In Jesus' name. Amen.