It's literally translated "Street corner demon (s)", actually. I'm only studying Japanese so I don't know all the connotations, but I think this is more "demon who lives on the corner of the street in my hometown" than "demon who literally lives next door".
And I think this is also the case where the title is kinda multipurpose. On one hand, it's about Shamiko, a demon who has a very "door-next-girl" feel to her. But on the other hand, it kinda also hints to the core conflict of the manga, though it's also kinda in the open. It is about a town where demons can live next door to normal people, and what it means to the people and the demons, and also about those demons integrating into human society and become "next-door". Hell, of the two clans who live in the town, it's the dark clan that is more important since they are the ones the town protections were created for, nobody hunts magical girls so there's a lot less reason for them to get attached to this town, so there's a justification why it's "demons" too.
I really like this style of naming, where it's seemingly about something banal or just a catchy name, but then you understand it's really about the themes of the work. Dungeon Meshi is like that too, where it's at much about delicacies you cook in dungeon as about adventurers being delicacies for the dungeon itself, and the cycle of life in general
. Though I guess Machikado Mazoku doesn't go quite that deep here.