Demons

I watch the show too. Bill Cypher is a creature that exists in an entirely different world. The only way he can join us is if you break the seel that binds him to his world, or create a bubble where both worlds are present. His world is the dreamscape. This is a world above us where objects and creatures are not bound to the same rules as us. The bubble creates a cross between worlds. There he can exist in our world without leaving his own. His dream based powers form when you enter his world. There, the rules don't apply, so you can do anything based on your thoughts