And, having made peace through the blood of his cross, by him to reconcile all things unto himself; by him, [I say], whether [they be] things in earth, or things in heaven.
Note 15 at Col 1:20: The peace that Paul was speaking of here is peace between God and man (see note 2 at Ro 5:1). It was purchased with the awful price of Jesus' blood. The price paid was greater than the sum total of all of mankind's sins. Therefore, total and complete peace is now ours.
Note 16 at Col 1:20: It is important not to interpret this passage in a way that would contradict the clear teaching of other scriptures. Therefore, unrepentant people and fallen angels must be excluded from the things that will be reconciled to God. Satan's kingdom is spoken of as being under the earth (Php 2:10) and in the lower parts of the earth (Eph 4:9). So, all those damned to hell will not be ultimately reconciled to God. This verse is speaking of all things in heaven and on earth coming back into harmony with God.
The things on earth that will be reconciled to God include those individuals who have put saving faith in Christ. The animal creation (Ro 8:19-21), as well as this physical world, will be renovated and reconciled to God (Re 21:1). What are the things in heaven that will be reconciled to God, if demonic powers are excluded?
Apparently sin affected not only people and this world, but the whole universe and heaven itself. It is possible that the deterioration that we see evident in this world extends throughout the heavens. The Scriptures speak of war in heaven where Satan and his angels were cast out and down to the earth, and their place was found no more (Re 12:7-9). This war may have caused scars on the universe that will be purged. Whatever place Satan occupied must be vile and therefore must be cleansed. Certainly, the demonic presence of Satan before the throne of God (Job 1:6 and 2:1) brought some defilement to the glory of heaven. Jesus will bring all of the creation in heaven and on earth back into the glorious harmony that was originally intended.