The Conqueror's Shadow published in 2010 by Ari Marmell, which is a bit later than you said, but otherwise matches on all counts.
They called him the Terror of the East. His past shrouded in mystery, his identity hidden beneath a suit of enchanted black armor and a skull-like helm, Corvis Rebaine carved a bloody path through Imphallion, aided by Davro, a savage ogre, and Seilloah, a witch with a taste for human flesh. No shield or weapon could stop his demon-forged axe. And no magic could match the spells of his demon slave, Khanda.
Yet just when ultimate victory was in his grasp, Rebaine faltered. His plans of conquest, born from a desire to see Imphallion governed with firmness and honesty, shattered. Amid the chaos of a collapsing army, Rebaine vanished, taking only a single hostage—the young noblewoman Tyannon—to guarantee his escape.
Seventeen years later, Rebaine and Tyannon are married, living in obscurity and raising their children, a daughter and a son. Rebaine has put his past behind him, given up his dreams of conquest. Not even news of Audriss—an upstart warlord following Rebaine’s old path of conquest—can stir the retired warrior to action.
Until his daughter is assaulted by Audriss’s goons.
Now, to rescue the country he once tried to conquer, Rebaine once more dons the armor of the Terror of the East and seeks out his former allies. But Davro has become a peaceful farmer. Seilloah has no wish to leave her haunted forest home. And Khanda . . . well, to describe his feelings for his former master as undying hatred would be an understatement.
It came up with my search for fantasy novel conquering mercenary copycat. It has the former warlord with a demon slave who retired after marrying one of his conquests. Another warlord is doing what he was doing before and he gets the gang back together, one of which had become a farmer.
And from what I can tell, doing searches, Corvis thinks that Audriss is his brother-in-law, but it's a red herring.