An N-Form was an alternate form of every living being in N-Space. Upon the death of an individual their dead N-form would leave Null-Space to a higher plane, rather like travelling up a tunnel of light. Their negative emotions were left behind to become monstrous beings.
Occasionally, after trauma or when an individual could not accept their own death, an N-form remained in torment. N-Forms desired souls for sustenance and could escape through flaws in the barrier into our universe, where they relived the last moments of their life as a ghost. Poltergeist activity was common in the presence of an adolescent, though the Third Doctor dismissed poltergeists as low grade N-forms. (AUDIO: The Ghosts of N-Space)