Undead are one of the three (four with DLC) playable races. Their population uses up mana instead food. The Undead are the best at maximizing Mana Production in cities, having access to an additional Mana Multiplier building.
Most undead units are immune to Death Magic, but take extra damage from Life Magic. They also cannot be healed by conventional healing spells (though spells to heal non-living things will affect them, and those with the favour of Krypta will gain access to undead-specific healing magic).
They have such unique buildings as:
Field of Ghosts (on Pumpkins), Magic Converter (on Magic Field), and Laboratorium (on Silver Deposits).