Jesus, and the four men He had just called to follow Him, entered Capernaum. On the Sabbath day (i.e., Saturday), Jesus entered the synagogue and taught therein. Reading and explaining the law in the synagogue was not confined to the scribes (cf. Acts 13:15ff).
The astonishment of those present was understandable. The scribes were learned men who preserved, copied, and expounded the law and Jewish traditions. The scribes spoke on the authority of Moses or the elders. They were fond of quoting certain rabbis for their source of authority. Contrast this with Jesus' often used statement - "I say to you" (cf. Matt. 5:18,20,22,26,28,34, etc.). The people could not understand how one so lowly (in their estimation) could speak with such authority.
There was a man present in the synagogue who had a demon (i.e., "an unclean spirit"; Mark 1:23). The Bible clearly teaches the reality of demon possession in the first century. However, such no longer occurs today (note the prophesied end of demon possession in Zech. 13:1-3). It is reasonable to understand that God permitted the devil to exercise demonic power, such as possession, during the first century. This permission would be a necessity in order for Jesus to cast out such spirits miraculously. However, to assume that demon possession continued after the age of men working miracles ceased (cf. I Cor. 13:8-13; Eph. 4:7-16) would be to assume that God allows Satan today to possess certain persons, and those individuals have no hope of breaking free of the demon! God would certainly not act in this unjust manner. He allowed demon possession in the first century because there was a miraculous remedy available. Such cannot accurately be said regarding the twenty-first century.
We learn from Mark 1:24 that this demon realized that eventually he would be punished by Jesus (cf. Matt. 8:29). However, this is not that time. Jesus came to Earth this first time to destroy the works of the devil (I John 3:8). At His second coming, the workers of evil themselves shall suffer (Matt. 25:41).
In general, demons had knowledge and faith of Jesus' deity (James 2:19). Additionally, they frequently confessed Him before men. Does this mean they will be saved according to Romans 10:9,10 or John 8:24? Certainly not! Faith and confession without genuine submission to God will not save a demon or a person (cf. Matt 7:21-23)!
What prompted this demon's confession about Jesus as "the Holy One of God" (cf. Psa. 16:10)? Such is not revealed, but perhaps he believed he could appease Jesus' wrath and that consequently he would be dealt with in a kinder manner. It is also possible that Satan desired to sow seeds for the charge that would later be made in Matthew 12:24 (namely, that Jesus worked by demonic power).
Jesus replied - "Be quiet, and come out of him!" (Mark 1:25). Our Lord, through this command, refused to receive the demon's testimony. There are at least two reasons for this: (1) Jesus' hour had not yet come; that is, it was not time for such declarations to be made public yet, and (2) if He had received such testimony, some might have mistakenly believed that Jesus sustained friendly relations to demons.
The demon first caused the man to go into a convulsion, and then, with a cry of rage, he came out. This description seems to indicate that the unclean spirit did not come out willingly. However, he was unable to overcome Jesus' power and ignore His divine command. Luke records that the man was not injured by the incident (4:35).
Jesus' power to command unclean spirits amazed the people, and it likely seemed even more mysterious than His power to work physical miracles. Through this miracle, Jesus demonstrated His actual possession of the authority which He had assumed in His manner of teaching. Jesus was (and is) ruler over the physical and spiritual world!
Any community, whether ancient or modern, would go wild over such exhibitions of power and authority. Jesus' fame consequently spread rapidly.