You need to create a database named demodb (or something else). Use the
demodb.sql file as a template. With mysql:

   mysql <demodb.sql

Then you need to mount the application:

   papp-admin --app demo \
              --appset default \
              --path demo/demo \
              --mount /uri

You also need to modify a line in demo/demo.papp to reflect your database
setup:

   <database dsn="DBI:mysql:demodb" username="xxx" password="xxx"/>

It is easiest to do using the admin web interface. After that, demo should
be visible under the /uri-URI on your server, or using the exec.cgi
script, under /cgi-bin/exec.cgi/demo.