The word yokai is used in Japan to refer to a set of creatures that are not necessarily evil, but also not necessarily good. An equivalent term in English is difficult to hit exactly, but the old use of the word faerie in Celtic mythologies come close. Another proposed translation is goblin, but as you’ll see, neither word quite brings to mind the images in the Japanese myths and stories. For those who are studying Japanese, I’ve included the Kanji and its explanation below.
The Japanese kanji for the word yokai is 妖怪. According to the Kojien 広辞苑 dictionary, it means “a strange creature or phenomenon that cannot be explained by human knowledge.”
For the true kanji nerds among you, below is the etymology according to 漢字源（rev. ed. 2011, publisher 学習研究社):
1) yoh 妖
If you’re familiar with kanji, you’ll recognize the first radical in the pair as onna 女, which means woman. A surprising number of malevolent yokai are women (more on that later). The second radical is the less common yoh 夭 meaning flexible and also to die young (not to be confused with ten 天, which means heaven!). The dictionary lists four meanings for the radical pair:
a) adj. Flirtatious. A flexible (woman). A woman who curries favor through flirtatious actions (this is the G-rated translation).
b) adj. Strange. Something that deceives and mysteriously bewitches humans.
c) noun. A bewitching female creature. Or alternatively, a creature that deceives many people.
d) noun. Misfortune.
This kanji is a bit trickier and is made up of three radicals. The single radical on the left represents kokoro 心, meaning heart. The top radical on the right is mata 又, which originally meant to cover something with one’s right hand. The bottom character is tsuchi 土, meaning dirt. Without the left radical, the two on the right together mean katamari 塊, or ‘hard lump’ such as patted earth. However, when combined with heart, they elicit the feeling of something strange (such as a horn) protruding from a round head (I’ve no idea how, and I checked with my Japanese husband to make sure I translated that right–feel free to post any conjectures). The dictionary also lists four meanings for the kanji:
a) adj. Strange. A strange figure. Mysterious.
b) verb. To think somehow odd. To find fault with.
c) noun. Mysterious thing. Creature.
d) adv. Extremely.
Putting together those definitions should begin to give you an idea of the diverse group of creatures the term yokai encompasses.