The word devil is to be expunged from CofE baptisms so that instead of being asked to 'reject the devil and all rebellion against God', parents and godparents will be asked to 'reject evil' (see story here).
Despite the fact that four of the five letters in the word devil spell out evil, the two words have different etymologies. Evil was written yfel in Old English, with the initial e and the v making their first appearance in Middle English in the form evel. The OED notes that this was originally a dialect form - in west midland and Kentish - but by the 15th century had become more widespread. The word most likely has developed from an Old Germanic root meaning 'up' or 'over'. The OED suggests that therefore the primary sense of the word would have been 'exceeding due measure' or 'overstepping proper limits'.
Devil is another word that has always been in the language; in Old English it was written with a b or an f (diobul, díoful, déoful eg). It comes ultimately from the Greek διάβολος (diábolos), meaning 'accuser, calumniator, slanderer, traducer'. In ancient Greek the letter β, beta, was pronounced b, but in a linguistic process known as betacism, the b sound shifted to a v.