Illustration from Perfect Memento in Strict Sense.
The other side of the Sanzu River.
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Higan (彼岸) is on the other side of the Sanzu River. This place is a Pure Land with no weather, no seasons, and no night and day, it's just an endless flower garden with a gentle warmth. It is strictly not part of Gensokyo.
Dead souls will wait at the Shigan(此岸) (the shores across the living world) of the Sanzu River for a Shinigami to ferry them one at a time. As one gets to the Higan side, there is nothing to do but silently wait and contemplate death until the Yama is ready to make the judgement. The yama, who can see the souls' past, will judge whether they should go to the Netherworld, Heaven, Hell, or be reincarnated. If it's Hell, then the soul will fall outside the cycle of reincarnation temporarily.
Higan is formed to be combined with that or over there (彼) and shore (岸), so its literal meaning is "that shore" or "the shore over there". The Shigan(此岸), which is located on the opposite end to the Higan, can literally mean this shore or the shore of here as well. In fact, both are actually used so in Japanese Buddhism.
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