Magic is alive. We know it best as particles of consciousness which permeate the world around us. An individual particle of magic is known as a monad. On their own, monads are inconsequential, but numbers bring out their hidden power. Monads naturally gravitate to eachother, they aggregate, form pools, puddles, webs, and threads.
A spell is, more or less, a small ‘machine’ composed of monads. If monads are simply particles of consciousness, then a spell is a thought in three dimensions. The defining characteristic of a spell is the ability to perform a function, the nature of which is determined by the arrangement of its particles. These shapes can, in theory, be read and interpreted, but in practice it’s extraordinarily difficult to accomplish this, as monads are tiny, indistinct things not easily examined by modern technology.
The mind of magic is extraordinarily powerful, and its thoughts hold the power to bend reality itself. Spells accomplish this by assembling, and then destroying, particular monad-agglutinations in specific orders. Each use of a spell releases the magic formerly contained by the burnt agglutination into the atmosphere, and so, in order to work indefinitely, spells require a continuous supply of fuel. By this principle, it’s exceedingly rare to find truly isolated spells in nature, most form what are known as spell systems. As the name would indicate, these are interlinked webs of spells which function as a unit. For example, a common arrangement includes distinct spells dedicated to the uptake of magic, the storage of magic, and the exertion of change, or ‘casting’. Many spell systems that are otherwise isolated possess the ability to reproduce themselves, or mechanisms of self-maintenance (as the act of casting can cause wear). And so there exists, particularly in areas of high magic density, populations of rogue, free-living spell systems, not unlike the microbes which float about souplike in a pond.
Not all spell systems actively cause change, some simply passively alter the conditions of their environment in physics-abiding ways, while others only store information. Spells like these can exist in areas of low magic density, as they require little to no raw magic fuel. Spells belonging to both categories can be found within the human soul.
Just as monads aggregate, so do not only spells, but spell systems. Some spell systems form webs of such profound complexity to exhibit the emergent property of ‘higher consciousness’, and thus become what is known as a soul. The exact qualifications of higher consciousness is a can of worms not fit to be cracked open in this article, but for simplicity’s sake let’s say it is an ability to conceive of the self and the world with an articulate intelligence comparable to that of your average human being. This is not to say all souls are like minded, indeed one may find the mental machinations of an elf or dragon or the like rather obscure!
This being said, the spell-soul line is a fraught and blurry boundary that evades clearcut delineation. That is to say, the difference between a very complex spell system and a simple soul is so vague as to be arguably nonexistent. There exist spell systems which are not discernible sapient, that nevertheless possess flexible intellects of their own, displaying the ability to learn and adapt their behaviors. These more animal-minded spell systems are referred to in the technical nomenclature as spirits, though colloquial use of the term frequently differs. Perhaps the boundary between spell and soul then is more aptly regarded as a gradient, with a spell at one end and a soul at the other, and the spirit bridging the gap.
The soul is only a small fraction of the gestalt of a human being, though an essential one. The human body is made of flesh first and foremost, with the soul representing a spark of magic nestled within. This is still much more than is contained by other earthly animals, most of which harbor a negligible share of magic, if any at all. There are other soul-bearing, magic-imbued creatures of flesh, however. Across human cultures they are known by many names, but for the sake of consistency we shall simply call them fairies. If the human soul is but an ember in the heart of a log, then the fairy soul is a great crackling bonfire. Poetics aside, a fairy is any creature that has a body composed of both meat and magic, though the proportions vary. By this definition, man himself is technically a very low-magic breed of fairy!
But what of creatures without any flesh at all? They exist, and most literature refers to them as demons. Though that may sound sinister, the definition is simply any being purely magical in nature: a vast category of entities encompassing both the planktonic simple spell systems which gather in the air around fairy gates to the human soul in isolation. To elaborate, the human soul can survive outside the body (and is forced to do so upon death), and in this state, it is technically nothing more than a small variety of demon. A Ghost, then, is nothing more than a demon that once inhabited a body that it was born into. It is not enough to say a demon that once had a body, as this would then include expelled parasites and failed possessions, neither of which can rightfully be called ghosts.
The kind of ghost left by a being depends heavily on the relationship between the magical and material elements of the entity during its life. For example, the human soul is somewhat like a hermit crab, hiding in a shell of meat, and can be extracted intact. But many fairies have much more elaborate souls, and flesh that does little more than insulate and compartmentalize the different spell-system groups, allowing more complex organization while circumventing the limitations of being made of a substance which clings eagerly to itself. Their immaterial and material selves are structurally intertwined in complex and inextricable ways. This is lost upon the death of the biological body, however, creating a tangled, disoriented, and unpredictable ghost, one that's usually rather upset about it's own death.