If you ask me whether Shiva exists, I can answer, yes! But I don’t know about the ghosts around him (laughter). Yes ghosts do exist but they are not different from him. They are in him.
The 5 elements are known as the Panchabhutas. So Air, Water, Fire, Earth and Space are collectively called the five bhootatmas. Some souls also become ghosts and that is because even after leaving the body, they are not able to drop their vasanas (impressions due to cravings and aversions of the mind). That is because even after the soul leaves the body, the realization does not dawn that it is the eternal light, or consciousness.
It is like, the food is in front of them and they are thinking of eating but they can’t actually eat it.
The word ‘Bhootkaal’ means the past. This is because it has already passed, but still one is holding on to the impressions of it and unable to drop it. Ghosts are also souls but they have lost their power. They are powerless as they have not realized that they are souls. When the soul attains self-knowledge, then it becomes powerful. When they realize this, they no longer remain as ghosts (they are called earth bound souls).
Note – This is an excerpt of Sri Sri Ravishankar Guruji’s discourses (Satsang) of Art of Living.