A lich is a type of intelligent undead. As such, people can become a lich only through a specific ritual. Their form is typically skeletal, although they tend to enhance their physical body in various ways to make it more durable. Liches generally learn Illusion Magic in order to create the semblance of flesh over their skeleton.
The unique aspect of a lich over other forms of undead is that their soul is not fully anchored into their body, nor dependent upon it. A lich's soul is stored in a phylactery, which they conceal somewhere and enchant to be very difficult to destroy and locate. Upon the destruction of their skeletal body, their soul will snap back to their phylactery, from which it can possess or construct a new body. Because of this, they tend to keep a stash of extra bodies at their phylactery's hiding location. So long as their phylactery exists and their soul remains connected to it, it will not move on into the Ether for rebirth.