Wonder Land

Wonderland (ワンダーランド Wandārando) is the place where the dead people apparently reside in. It's shown to be a pocket dimension. In truth, the place is one kind of a giant natural lacrima that is capable of embodying the figures of dead people, should someone close to them come in contact with this place.

Overview
As speculated, the place is inside some kind of pocket dimension and there is few ways to access the location. Supposedly being a natural lacrima, the place gathers lots of eternano given off by Earth Land's Atmosphere. Due to some kind of yet unknown spell, whenever someone enters this location, it will react and create the vision of a dead figure who was close with the person. Next to zero people know that the place once was cast upon a Arc of Embodiment spell which uses the samples of a mage's magical energy in order to create a ethereal construct that is essentially said mage. The lacrima absorbs the infinite eternano of the atmosphere to keep the spell active, with the death of some mages, their magical container mixes in with the land's, as such the lacrima may also take some samples of the mage.

Trivia

 * This place and the idea, were highly inspired by the Capital of the Dead from the Nanatsu no Taizai Series.