Quoting GlyphGryph's from earlier in the thread because it's my favorite one about the Gobbos so far and it makes the most sense to me.
Goblins are about not power or greed, but SUPERIORITY, both individually and as part of the collective that makes up their way of life. They believe if you are superior, you should prove it - its that simple. If others do not respect your superiority - you make them.
Think about it - They commonly wage war, unending war if possible, on most civilizations they encounter. But they don't do it for stuff, they do it to prove they can win. That they are superior. And they truly believe that they are. Even more, they aren't greedy or racist - in a way, they are compassionate. They steal the children of their enemies because they wish to share their superiority (and thus prove it). They see the strengths of other races, and believe any creature that follows the goblin way is well and truly a goblin, regardless of race. They believe that with the right environment any race, even dwarves and elves, can also be a member of the superior.
They are the least racist of all the races - they don't hold any shape or type of creature as inherently undesirable. Other cultures need to be destroyed if they do not submit, of course, but their members if possible should be integrated into the glory of goblin society. They do not see a goblin society without goblins as a problem, even. Race simply doesn't enter into it.
As to worshipping demons - once again, its about superiority. Goblins believe anyone can be a goblin, and they believe the best goblin should be in charge. Demons just... abuse those notions. They simply prove their power and take what any goblin believes should be the rightful place of the most powerful creature around - ruler of those who are less powerful. Goblins would have no problem worshipping and following a dwarf assuming he met those same qualifications.
Goblins are not evil. They believe they are doing the right thing, the good thing. It just happens that the "good" thing is extremely unpleasant for the vast majority of sapients on the planet - but the goblins go out of there way to save as many of these souls as possible when they can.
In essence - they are the essence of a powerful an organized religion. All others must be absorbed or destroyed.