The Collaborative International Dictionary of English v.0.48:

Demarcate \De*mar"cate\, v. t. [See Demarcation.]
   To mark by bounds; to set the limits of; to separate; to
   discriminate. --Wilkinson.
   [1913 Webster]

WordNet (r) 3.0 (2006):

demarcate
    v 1: separate clearly, as if by boundaries
    2: set, mark, or draw the boundaries of something [syn:
       demarcate, delimit, delimitate]

Moby Thesaurus II by Grady Ward, 1.0:

118 Moby Thesaurus words for "demarcate":
   analyze, be characteristic, blaze, blaze a trail, blemish, blotch,
   bound, brand, chalk, chalk up, characterize, check, check off,
   cicatrize, circle in, circumscribe, contradistinguish, dapple,
   dash, define, delimit, delimitate, demark, describe, determine,
   differentiate, discolor, discriminate, distinguish, divide, dot,
   draw the line, earmark, enclose, engrave, fix, fleck, freckle,
   gash, hatch, impress, imprint, keynote, lay off, limit, line,
   make a mark, mark, mark boundaries, mark off, mark out,
   mark the interface, mark the periphery, mottle, nick, notch,
   pencil, pepper, pick out, point, prick, print, punch, punctuate,
   puncture, riddle, rope off, scar, scarify, score, scotch, scratch,
   screen, screen out, seal, seam, segregate, select, separate,
   sequester, set a limit, set apart, set off, set the limit,
   set the pace, set the tone, sever, severalize, sieve, sieve out,
   sift, sift out, sort, sort out, sound the keynote, specify, speck,
   speckle, split hairs, splotch, spot, stain, stake out, stamp,
   stigmatize, streak, striate, stripe, subdivide, subtilize,
   surround, tattoo, tick, tick off, trace, underline, underscore,
   winnow