I researched the same problem and I found the solution.
The trick is to add your user “demo” to the group www-data (since www-data is a group)

add user “demo” to group “www-data” (below replace demo with your username)

sudo usermod -a -G www-data demo

set permissions for user group www-data

sudo chgrp -R www-data /var/www/html

followed by

sudo chmod -R g+w /var/www/html

Now you can modify files as “demo” via SFTP and your wordpress installation can modify files without requesting credentials

Since the nginx process is running as www-data the root:www-data ownership would only work with group write permissions set. There is no major issue with running with your web files owned by www-data:www-data but if you are concerned you could give ownership of wp-content to www-data and leave the rest of the install as root:www-data.

this solved my issue, worked perfect!

Thank you sugarhill! Such an important thing … surprised we had to dig for it

Thank you so much, Worked like a charm.

This solution worked indeed - Thanks a lot sugarhill
BUT unfortunately, the file permissions changed from 755 to 775… and a warning message is appearing now in the wp-admin interface, stating -
———->>
var/www/html/wp-content is write-able. When finished installing the plugin, change the permissions back to the default: chmod 755 /var/www/html/wp-content. Permissions are currently 775.
———->>
If I change the file permission, then it again shows the same issue. Any suggestion? Thanks for your support.