The Ghosts, also sometimes refered as Sentiments, are not an actual race, and not actually a ghosts in the sense that they are not a wandering souls of the dead. The Sentiment is just a strand of a soul of being who died with regrets. They have little to none memories of their previous lives; they are shadows of their former selfs, things without life. Their full existence is based around some strong yearning, like love, revenge, etc. They have awareness but no flesh or blood and normally they dissipate with time.
In the Necropolis, the Sentiments can obtain a new life, they are no different from people outside and would never dissipate. The Sentiments there took on the form of Humans, Demons, Ghost Immortals, etc; but they just had no trace of life. In the Necropolis, they even had their own dao lineages. They can cultivate and get life, flesh and blood. However, they can't leave the Necropolis or they would fade away. Only two Sentiments managed to left the Necropolis without dissipating: Immortal Emperor Ming Du and Huang Jiaofu.[?]