Credit for this basic idea goes to... someone. Probably Revlid, knowing how much of his original Underworld Revision I've internalised.
In essence, though, these shades basically exist to smooth over the fact that given the nature of ghosts in my revised deathly stuff, you are not going to have ghosts that are happy to be farmers. Ghosts be cray-cray, yo. A society of ghosts is about as divergent from a living society as a society of demons.
Now, that's not entirely desirable. We do want ghosts to be strange and weird, but it's probably not a great idea to make every deathly society into Sadako, Alma, Beetlejuice, and the Woman in Black locked into a box. But I don't want to allow "I'm a ghost and I'm happy to be a farmer". Hence, the solution is to use the connections between the Underworld and memory to make a class of scenery-people (also, scenery animals).
This has the added advantage that if they're memories of Creation, they're going to spawn mostly close to Creation. Which incentivises conflict in the Underworld, because the powers in the lands of the Dead are older ones - like all those 700 year old Shogunate ghosts. Hence, there's a good reason for them to invade the shallower domains and take their shades as tribute.
Shades
The Underworld is a land of memories as well as a land of death. Its geography is made of recollections and nostalgia. But a location is more than its physical description; a location is its people and its society and its feel. Therefore, just as an Underworld forest is filled with the memory of trees, so too is an Underworld town full of the memory of people. These walking, moving memories are known as shades.
Shades are not ghosts. Ghosts are the lingering souls of once-living beings, held to the mortal coil by a refusal to die - or by fell magics that bind them. A shade exists because the living and the Dead remember a location as having people dwelling in it. They are mobile scenery, part of the pallid imitation of life the Underworld pretends to. A shade does not think, does not feel, does not love or laugh or cry. They are the teeming masses in the background, the recollection of being surrounded by people and of seeing animals in the fields.
In some domains, one can walk through the lands of the Dead and see very few Dead. Shepherd shades herd shade sheep. Faceless villager shades pick at the ground, harvesting pomegranates and pale grapes from orchards. When the lords of death and the greater Dead war over domains, the shades within are part of the landscape, to be seized by the victor. Lesser Dead capture and corral them like beasts, selling them to other domains or taking them for their own personal use. The shades do not care, as long as they can do what they must. They are the ultimate downtrodden masses; without will and without want.
Shades are one of the key indicators of the proximity of a domain to Creation. A healthy domain has fresh shades coming into existence, for the memories of mortals shape the land. Once a domain is cut off from the living world, however, this flow slows to a trickle, as now only the pallid and distorted memories of ghosts bring them into being. The shades that do come into being are warped and twisted - memories of memories of people, rather than memories of people. And this cycle continues as a domain sinks lower and lower, and the shades grow more and more warped. These domains must resort to trade or invasion to take fresh shades from more healthy settlements, and this is a major cause of wars in the Underworld. The Shogunate powers of the lands of the Dead are buoyed up by countless shades taken in tribute, forming a mismatched underclass from many modern societies.
If it were not for shades, the society of the Dead would likely lock up. Ghosts only linger when they have some great driving urge that allows them to hold off the lure of Lethe. They all have great and terrible wants; the need to get revenge on their killer, the need to protect their children, the need to drag young men down to drown in stagnant water. This is not a mindset conducive to subjugating one's desires to another's. Shades, on the other hand, exist to fulfill whatever recollection brought them into being, and so clean floors, rebuild structures, and maintain the slowly mouldering memory-realm.
There is much necromancy and deathly thaumaturgy that invokes or draws on shades. Perhaps the most famous are the lavish sacrificial rituals of thanotic kings, that ensure that an abundance of shades that wear the face of the sacrificed men and beasts form in the Underworld. When a necromancer would animate a corpse without binding a ghost into it, she crams a shade down its throat to get a shambling, stupid servant. Shade servants are sent to carry messages to a target or bear a carefully crafted curse.
Shade Mechanics
Shades no not have true Attributes or Abilities. Instead, they have a small number of Style dice pools, almost always rated at 5 or less. Shades cannot take actions outside their Styles. A soldier shade might be able to fight, but it cannot fix a barn or herd sheep. Shades cannot learn and do not gain XP, and only have a sense of self-preservation if it is in-theme for one of their Styles. They are always Enlightenment 0.