Yōkai are a race of usually-malevolent spirits.
Yōkai are a type of spirit, similar to ghosts. Yōkai, many of whom are magical creatures like Tengus and Kappas, typically reside in the Underworld, where they are feared by the ghosts that reside there, as they are capable of destroying them even beyond death. One yōkai in particular, the Guardian Tengu, is tasked with guarding the entrance to the living world. An alley near the Old Coot Cafe in the Underworld is home to several Yōkai, which Clinton Coot routinely warned Underworld newcomers to avoid.
Behind the scenes
This version of yōkai first appeared in Legend of the Three Caballeros in the episode Mt. Fuji Whiz.
Originally, yōkai are a class of supernatural beings from Japanese folklore and mythology. Some yōkai were said to be departed souls, be they of inanimate objects or living creatures, while others were thought to be magical creatures. Several yōkai were said to reside in the underworld, where they were tasked with punishing sinners. Only one of the yōkai seen in Mt. Fugi Whiz, the Kasa-Obake, is traditionally thought to be a departed soul, thus, it may be reasonably assumed that the other yōkai seen are "employed", as it were, in the underworld.