If one casually glances through just about any modern text on witchcraft, you find reference to mythical beings. The mythical beings described by all cultures truly do exist in a spiritual sense. The universe is permeated with the spiritual essence of existence. This manifests in different ways for different people. As such, the same being that appears to one witch as a fairy, may appear to a Christian as an angel, or to another witch as a different mythological creature. Spiritual beings are possessed of intelligence and the ability to interact with the physical plane in a limited fashion.
The Veil is a subtle barrier between the physical world and the spiritual world. It is with focused effort that one who is in the physical world can interact with the spiritual world. This is true also for spiritual beings. The nature of spiritual beings is as diverse as that of physical life. Unlike some other religions, in my tradition of witchcraft, all things are imbued with a measure of spiritual life. (This is the animist aspect of the religion.) The presentation of the spiritual aspect is more fluid then of the physical because it is based more heavily in the energy side of the ledger*.
When one dies, the physical form and spiritual break contact. The process is not precisely understood. Many different theories abound as to how this works and what happens after it is complete. It is my understanding that when we die, we have the choice of where we can go in the spiritual realm. This need not be movement to a permanent abode. I do believe that reincarnation happens. I also believe that the spiritual realms that people describe such as Heaven or the Elysian Fields are real. A great deal of thought and spiritual effort went into the creation of these places in the spiritual realm.
It may be that the physical manifestation of their existence is in the vibrational echo left in the physical plane of existence from the thoughts of their existence, but it is sufficient to support the spiritual existence. Just as our homes are more present in the physical world then the spiritual, so too are these 'realms'.
* Please note wave-particle duality of theoretical physics.