Spatial light modulation enhances capacity of optical communications by modulating spatial amplitude, phase and polarization degrees of freedom with recent success of orbital angular momentum based architectures. There is a hardware challenge to demodulate large symbol families or high order symbols requiring a general design of spatial light demodulation. Multi-plane diffraction (MPD) recently introduced for improving spatial modulation capabilities in free space optical channels promises utilization at the receiver side as a demodulator. In this article, we theoretically model, numerically simulate and experimentally implement spatial light demodulation based on MPD. Numerical simulations and experimental implementations verify capabilities of MPD for increasing inter-symbol distances at the detector front-end. We obtain approximately two times improvement compared with direct detection for basic design including three diffraction planes as a proof-of-concept and improved performance with increasing number of diffraction planes compared with state-of-the-art single-plane diffraction (SPD) based interferometric receivers. Besides that, we perform, for the first time, experimental implementation of MPD based spatial light modulation. In addition, symmetric-key cryptography application of the proposed system is theoretically presented with low decoder complexity while numerical simulations promise high performance security against intruders. MPD based design is practically applicable and promising for diverse optical architectures including both communications and cryptography as a low-cost, low hardware complexity, passive and high performance design.