The Ethereal Plane, also called The Spirit Plane, is a layer of existence that overlaps Quelmar and bleeds out into the Astral Plane, connecting the afterlife to the material plane.
About
The Ethereal Plane could be accessed from the Material Plane without magic by traveling to the far reaches of Quelmar's oceans. Traveling north of Osugbo or south of Pteris, for instance, some believe would eventually lead sailors to a great fog. Once entered, the ship would exist solely in the ethereal plane, and travel back to Quelmar would require magic, as attempts to travel back may bring them home, only to find that they exist in this ghostly dimension, able to view the material, but not interaction.
The name Spirit Plane for the Ethereal originated out of Troverth but would spread with humans all over the realm, eventually becoming the de-facto name for the plane by the CR era.
Souls
When a mortal dies, their soul passes into the Ethereal Plane where it can be taken by a psychopomp to their destined afterlife. Some of the most notable psychopomps include the death goddess Silent, and even more so, the ferryman Charon. Charon oversees the River Styx which connects together all the planes of Quelmar and serves as a highway for souls leaving the Ethereal Plane.
Though not all souls in the Ethereal Plane are willing to pass on, and the more restless of them resist the pull o divine psychopomps. These souls remain trapped in limbo within the Ethereal Plane and eventually waste away into ghosts, wraiths, specters, or worse. Where the Ethereal Plane is at its thinnest, these lost spirits can manifest in the Material Plane. Sometimes these lost spirits become so mad that they attempt to ford the River Styx themselves without the aid of Charon and become victim to its mind altering effects.
The Rupturing of the Ethereal Plane
After the destruction of the River Styx and the death of Charon in 925 PR, it became more difficult for souls to pass on from the Ethereal Plane. Over time this caused the Ethereal Plane to overflow with lost souls, thinning the barriers between the spirit and mortal realms. This was only exacerbated by the presence of the banished goddess, the Shattered Mountain, which had been ejected into the Ethereal Plane after being freed out from under the River Styx. In early 926 PR this would cause the Ethereal Plane to rupture, expelling these lost spirits across the Material Plane and the lower realms. These lost spirits lashed out, confused and scared, causing destruction wherever they went.
The rupture was eventually fixed by the efforts of an adventuring party known as the Hellraisers. First they created the Passage of Souls to replace the River Styx, reconnecting the Ethereal Plane to the planes of the afterlives. This new passage would be overseen by Aliria Servine, who would guide newly dead souls across the Obsidian Bridge to their final resting places, taking up the role Charon left behind. The souls that had been expelled from the Ethereal Plane were then funneled back into it by the druid Endine (Dina) di Valpadana. Taking up the Curse of the Scapegoat, Dina became a vessel that the spirits could pass through to enter into the Ethereal Plane, pulling back all the lost spirits.