PilotAwareAndroid doesn't use WiFi for its location fix, only GPS.
However, I'm not sure what SkyDemon does.
Essentially, the Android OS provides an API (programming interface) called "Location Services" which programmers can use for, you guessed it, location data. The API uses the best available source to determine location, GPS or WiFi or 3G. This is an easy interface for coders to work with but it is designed for more usual mobile phone applications. By ignoring the API and working a little more "under the hood", location can be determined from the GPS module only. This is what I did for the PilotAwareAndroid app.
There are some limitations, for example, the Android device must have a GPS chip, and it may take some time to get a fix when first activated.
It is a useful exercise to download and run the "GPS Test" app on your Android device. This will confirm that you have a functioning GPS chip (not all Android devices do) and also that you have a valid fix. Waiting for the PilotAwareAndroid app to populate will do the same.