Yuyuko is the ghost 'princess' of Hakugyokurou, the netherworld of the "formerly-living," but was once a living human. Long ago, after her death from suicide, her body was used to place a seal on the Saigyou Ayakashi, a dangerous youkai cherry tree, to stop it from killing innocent humans. During the events of Perfect Cherry Blossom, she enlisted Youmu to find a way to make the tree bloom to resurrect the corpse buried beneath it, apparently unaware that it was her own body. Forced to abandon her plan as it would only result in her own destruction and the unleashing of the Saigyou Ayakashi's terror once again, she resigned herself to continuing the existence she had been fated to.
She has the power to invite mortal souls to death, and those souls who perish this way wind up in Hakugyokurou rather than heaven or hell. Though it might seem dangerous for such a whimsical, flaky personality to wield such a terrible power, Yuyuko has an immense sense of responsibility regarding her power, and never uses it recklessly or out of spite, nor does she use it as a weapon. Ironically it was this power that drove her to kill herself in the first place.
Humans fear Yuyuko because of her awesome power and a general fear of the supernatural, but she is very cheerful and friendly. Unlike many ghosts she resembles a living human, and her playful, good-humored personality has a disarming effect. She often makes bizarre and nonsensical remarks and sometimes seems to overlook the obvious, leading to her characterization as an airhead or ditz. However, at other times she can be extremely cunning and perceptive and has a vast amount of knowledge; it is not known whether it is the ditzy side or the smart side that is her true personality. She seems to never take anything too seriously, and loves to tease her straight-laced assistant, Youmu, whom is her opposite in almost every way. She is also known for her incredible appetite and seems to have a food-related metaphor for any situation. Yuyuko is truly "dead and loving it."
(Source: Touhou Wikia)