So in martial arts or cultivation novels using Ancient/medieval Chinese setting, there is these alliances of sects like righteous/orthodox sects, evil/unorthodox sects, and demon cult/ demon sects.
What is your way of distinguishing each of these categories?
"It can be, however, the author wants" defeats the purpose of this thread so such responses will be rejected.
By their own cultivation technique.
The righteous/orthodox one are the general cultivation technique, where you use your hardwork to grow stronger.
The evil/unorthodox one are the cultivation technique that require some kind of evil deeds (depend of the story), generally these type of sects use double cultivation technique with a weak partner to steal their energy, these double cultivation technique require generaly sex, a lot of people sell the girl/woman of their family to these dude or the girl even go by themself to gain some gold. There also some type of technique using ghost/soul and like Sailus said these sects are evil but not the most evil ones.
The demon sects cultivatipon technique drift from the "normal" ones, since instead of using the qi/energy/essence used by any humans, they use demon qi, often coming from a demon corpse that they found or a demon artefact. Their cultivation technique require often the sacrifice of live to grant them power making them the big bad guys in those stories and since they grow stronger faster, to maintain them, the righteous/orthodox and evil/unorthodox have to unite to go against them.