An important aspect of real ferromagnetic particles is the demagnetizing field resulting from magnetostatic dipole-dipole interaction, which causes large particles to break up into domains. Sufficiently small particles, however, remain single-domain in equilibrium. This makes such small particles of particular interest as materials for high-density magnetic recording media. In this paper we use analytic arguments and Monte Carlo simulations to study the effect of the demagnetizing field on the dynamics of magnetization switching in two-dimensional, single-domain, kinetic Ising systems. For systems in the ``Stochastic Region,'' where magnetization switching is on average effected by the nucleation and growth of fewer than two well-defined critical droplets, the simulation results can be explained by the dynamics of a simple model in which the free energy is a function only of magnetization. In the ``Multi-Droplet Region,'' a generalization of Avrami's Law involving a magnetization-dependent effective magnetic field gives good agreement with our simulations.