Shapeshifting is the natural or artificial ability that one has to alter it's appearance into any age, gender, species and even object that it desire to.Some may even be capable of create objects from it's body, like the Demon King, who managed to create a large sword of his spectral composition to strike Torg down (wich proved to be a grave mistake, though, as Torg was welding Chaz, a magical sword that's capable to destroy any etherial creature that it touches, at that moment).
The limitations of shapeshifting varies from person to person, though some may be limitated by the way that they shapeshift. Aylee's species, for exemple, can turn into a varied of forms with it's own abilities and weaknesses, but such transformations are a reflex of adaptation to a determinated situation and/or involvement. So, they usually have no control to what form they take, nor the time they take to do that (wich varies from a few days to up to years). Other persons, on the other hand, may be envolved with supernatural stuff that may give them a less advanced, but more controlable kind of shapeshifting. This seems to be the case of possesion demons, who themseves can change the appearence of their hosts from it's natural one to a more monstruos that strongly relemble their own. Zoë, on the other hand, accidently recives a cursed necklace that can only turn her into a camel, but at least she can do it willing by saying the word Shupid, though anyone next to her can trigger the transformation by saying that, and when it happens, someone else has to say Kwi to turn Zoë back to her human form since that she can't speak as a camel.
Etherial beings, on the other hand, seems to have a more advantage and potent kind shapeshifting. Deities themselves display amazing elusive properties, with Uncle Time (and likely his brother) being capable of change from a human being into clouded head, and the Goddess of Goodness become entrapped for eons in a plast bag on the Demon King's refrigerator as a cloud of benevolance before Torg and Alt-Alt-Torg come to her rescue. Another exemple of divine shapeshifting is the demon Rithuly, who himself has been documented to change his shape, usually of a weathly, good looking man, a tentacled headed ghost, or his true form of a large, stygian dragon. Indeed, it's explicty stated that the gods in general are capable of take whatever shape they want to take.  However, all kinds of ethereal beings can do such shapoeshifting, not only gods, but ghosts and shadow creatures can do that as well. Squeeky-bobo, for exemple, tricks Torg into belief that he was his dead lover, Valerie, and nearly succeds in making Torg into commit suicide. The Groundhog's Shadow, on the other hand, often and purposely alters his appearence depending of who he's dealing with (when summoned or talking to another supernatural creature, he has the habit of turn himself into a horrific demon, but in the normal he tends to act goofy and often take humorous shapes to annoy or humiliate his host).