Q: Why are ghosts referred to as ‘shades’?”
A: At least since the ancient Greeks — though probably reaching back much further — death (thanatos, θάνατος, in ancient Greek) has been associated with darkness, specifically melas (μέλας), meaning “dark” or “black.” This ancient Greek adjective is in fact attached to thanatos numerous times throughout the works of Homer, as here:
Πάτροκλος δ’ ἵπποισι καὶ Αὐτομέδοντι κελεύσας
Τρῶας καὶ Λυκίους μετεκίαθε, καὶ μέγ’ ἀάσθη
νήπιος: εἰ δὲ ἔπος Πηληϊάδαο φύλαξεν
ἦ τ’ ἂν ὑπέκφυγε κῆρα κακὴν μέλανος θανάτοιο. (Iliad 16.684-687)
[Patroclus then called to his horses
and to Automedon to pursue the Trojans,
the Lycians, as well. How blind he was, poor fool!
If he’d done what the son of Peleus had told him,
he’d have missed his evil fate, his own dark death.]
(Translation by Ian Johnston; click here to view the full translation of Book 16.)
We can take this to mean that the Greeks saw the act of dying as the act of leaving the light. Thus, the spirit of someone dead would be out of the light, or literally in the shade — hence, a shade.