The Orlando epics basically recognize only two religions: Christianity and Islam. Sarracen is the catch all term to describe every character that was not a Christian, even the fairies like Morgan and Alcina I think are referred as such (don't quote me on this). Remember both epics were written right after the Crusades at the beginning of the Renaissance period when the tensions were still high, which translate on the main background conflict of the works being the war between Charlemagne and Agramante and there's put so much emphasis on the convertion of characters like Ruggiero, Marfisa, Brandimarte and others.