The Electrical Code

220.53 Appliance Load — Dwelling Unit(s). Let’s start with a practical explanation of what is demand factor. And that definition is: the ratio of the maximum demand of a system (or part of a system) to the total connected load for that part being considered. That is the common definition that is considered correct. To further elaborate, lets say a washing machine needs 10 amps to operate, and on the same circuit we have the entire basement lighting a total of 5 amps. So the total amount that circuit needs 15 amps at 100% demand factor. We know that all the lights in the basement will not be on at the same time. So the example in the NEC code book says with four or more appliances we know we will never use all four at the same time so the code says that 75% of the total load of all 4 appliances can be calculated. Ok lets put it all together. For ease of math lets say each appliance needs 5 amps to operate. 5 times 4 = 20 so 75% of that circuit is 15 amps. Simple right. I hope that helps you understand demand factor and this article in the code

“It shall be permissible to apply a demand factor of 75 percent to the nameplate rating load of four or more appliances fastened in place, other than electric ranges, clothes dryers, space-heating equipment, or air-conditioning equipment, that are served by the same feeder or service in a one-family, two-family, or multi‐ family dwelling.”