Incarnations

"Immortal creatures cannot deny their natures. That is the price of power." - Lao Mai the Sage

In the East, monks they say there are six paths of being, from celestials above to demons below. In the North, wise women will speak of the nine worlds and realms beyond the material. In the South, scholars record great tomes with the descriptions of monsters and spirits of every description. Terms like "spirit," "immortal", "duatling" and "mononoke" are used by different cultures to talk about this category of creature.

Incarnation is the general term for a being of arcane origin.

Just as a physical object like a ring or mirror can be imbued with a magical virtue by sorcery, a soul can have its very nature bound to a concept which grants it magical virtues. The more an incarnation embodies the archetype, motif, or trope that empowers it, the less mortal and the more powerful it becomes. Unlike celestials or undead, incarnations always have a physical component and cannot be pure essence, even if they can become incorporeal temporarily. Despite the term "immortals", even incarnations that cannot die of age can always be killed.
Incarnation is a broad category of creature. Elementals are incarnations of simple natural energies and materials. Terrestrial dragons are fire, conquest, greed, and predation. Fae, djinn, and yaoguai are each complicated combinations of physical forces like smoke or wood, emotive ones like drunkenness or melancholy, and story motifs like "lost in the forest" or "a supernatural bargain." Many of the beasts considered more supernatural than mere animals are imbued with virtues that make them incarnations. Though there are technicalities, most people who are not priests or scholars consider any being not better described as divine, undead, demonic, or mortal as an incarnation.
Incarnation is something of a sliding scale, as well. Some incarnations begin life as more mortal-like creatures and only become stranger in power and psychology over time. Some can breed with mortals to create half-blooded creatures that are mortal but can choose to shed that. Some mortals, called cultivators, seek to make themselves into partial or complete incarnations. Just as sorcerers transform their flesh into magical objects, cultivators transform their souls into spirit creatures. In this way they gain stronger qi, longer lifespans, and magical powers. Some even claim this brings them closer to enlightenment.
As for sorcerers, one of the methods they use for infusing objects or mortal creatures with magical spells is to harvest the material that makes up an incarnation. Most incarnations undergo unnatural dissipations after death, some becoming pure energy or returning to their base components. Skilled hunters can retrieve an earth elementals' eye before it returns to sand or a lightning dragon's teeth before they transmute into a thunderstorm. These remnants can be grafted or embedded into sorcerous constructs or the sorcerers themselves.
The archetypes that make incarnations, much like the ones that make up spells, originate from the Arcane Realm. This is, in the metaphysical hierarchy, the collective mortal unconscious, the source and repository of stories. (It is as real as a place someone cannot go can be.) Though some incarnations fade from the world and sometimes new ones arise, there is no beginning or end to whether they inspire mortals or whether mortals inspire them.