They are shades from the underworld, the remnants of dead people. They linger here because they arent allowed to leave earth's atmosphere. They are completely powerless in the physical sense but they can influence you on the spiritual level. They are not allowed to openly interact with the living, but they are allowed to influence things from behind the scenes.

The way to ward off the souls of the damned is ALWAYS to seek refuge with God, like a fledgling with a hen. Reciting the 10 commandments is a powerful weapon against them, as is invoking the Archangel St. Michael, who they greatly fear.

Trying to one on one them or battle them on your own is pointless, it's like trying to wrestle a stone pillar.

In the end you have to realize that sometimes God allows evil things to happen to achieve a greater good. They cannot go up against the will of God, if he doesnt grant them the freedom to roam around somewhere, they are powerless in that place. You can take that freedom away from them through prayer.