The four dream races are the four modes of sentient manifestation within the space between the heart of the Dream and the border with the Void.
Pure Dream is neither ordered nor chaotic, neither alive nor dead, neither free nor constrained, neither a wellspring of creation nor a furnace of destruction. Pure dream is filled with contradictions and quickly hard to distnguish from Void which shares all these properties.
In order to exist meaningfully the Dream has to dilute itself into being one thing or another, this or that. Sentient experience is part of the Dream, it is almost the quintessence of Dream, Void itself abhors nothing more than self-awareness. The Dream expresses life on two axes: Matter and Aether, Evanescent and Permanent
Matter and AEther
The first axis of life defines whether a sentience is anchored to a particular collection of matter or exists purely as a concept which may or may not infuse matter as a temporary holding place.
Two of the races, Mortal and Fae, are Matter-based races whose body and soul - for want of more appropriate terms - are fundamentally inseperable. The other two races, Spirit and Jin, exist entirely on the plane of AEther, they may "possess" matter and use it as a material body, but they are never permanently bound to one specific collection of matter.
Evanescent and Permanent
The second axis of life defines within it two properties that are always joined. Evanescent races are fully possessed of free will, but are set to live and die within a span of life. Permanent races never die (as long as they are not consumed by the void) but they are subject to laws of existence which do not concern races possessed of free will.
The two evanescent races are the Mortals and the Jin. The two permanent races are the Spirits and the Fae.