The film was originally conceived as three stories that would play out separately, but all have the unearthed remains of Satan being the linking factor between them. The stories of Peter Edmonton and his mad fiance, the possessed village children, and the Judge's battle with evil were all at first suppose to take place independently. However when the script was written it was decided that the plots should be combined to create one central story.
The scene where 'Satan's skin' is cut off of Margaret was inspired by an actual event from screenwriter Robert Wynne-Simmons' childhood when a doctor performed an operation on him while he was laid out on a kitchen table.
Actor Simon Williams said while shooting the scene where he's attacked by the furry claw, "they had a little insert shot of my hand reaching for the dagger and I was doing a lot of business of inching my fingers forward and twitching them. Piers said, 'Cut! Cut! Cut! Simon, don't overact with your fingers."
According to screenwriter Robert Wynne-Simmons the previous success of The Conqueror Worm (1968) caused the studio to pressure the writers to replicated elements of that film for Blood on Satan's Claw. Wynne-Simmons said that the scenes where the Judge studies the book on witches and the scene where the villagers witch-duck Margaret were added at the insistence of the Tigon Studio executives.
The plot about Rosalind Barton's visit to the Vespers house was based on an original story that screenwriter Robert Wynne-Simmons wrote in college. The scene where Master Peter cuts off his hand while having a dream about being attacked was also taken from the story.
The first draft of the screenplay took place in the Victorian era and the films villain was a more ambiguous evil-element. However the executives at Tigon Studios weren't satisfied with the early draft. The studio objected to the ambiguous unnamed evil and to a heavy-handed finale that wasn't the dramatic showdown between good and evil that they envisioned for the film.
According to director Piers Haggard the scene of the coven's attack and rape of Cathy Vespers was completely unplanned and created mainly during the shooting. Haggard said even the coven's chant was written right on the spot.
Upon its initial release the film caused some minor controversy due to the graphic nature of its violence, especially for the scene where Margaret has the patch of "Satan's skin" removed from her thigh.
This is often grouped in the short-lived genre of "folk horror", a series of horror films set in rural areas that were all released around the same period. Other films in this category include The Conqueror Worm (1968) and The Wicker Man (1973).