The Journeyman game uses a very specific set of monster groupings: animals, aliens and spirits, where spirits is then subdivided into demons, faeries, undead, and occasionally angels (depending on the campaign). The illustrations in this post were found at Quique Alcatena.
Animals and Aliens are flesh and blood creatures that make sense in their context. They have to fit into a given ecology, normally. There are only a few aliens in my Last Empire campaign, and most are neutral towards humans. The Blomeetah live in gas giants and have trade agreements with humans. The Littranu live in methane environments and have little to do with us. The Iirnv are at war with everyone, even themselves, and rarely will an encounter with one be less than catastrophic for everyone concerned. The Seveyzsas (serpent-headed humanoids) are Terrans’ chief enemies, but only because they evolved in a similar environment and therefore are in competition for space with the humans. The two races co-existed for a time, which is why one can still find jimjam, Jaz, Sharkbirds, and the occasional Dragon on Terran worlds. Many Terran species have disappeared because of that same competition. Sometimes a creature like a Thrasher (from the Iirnv homeworld) will find its way into a Terran setting. They are usually easy to find, as they devastate the landscape for miles around.
Spirits are associated with the Otherworld, another plane of existence. Undead are those mortal creatures that refuse to leave the mortal plane, or who have been chained to it through sorcery. Faeries and Demons make up the bulk of spirits. Faeries are the spirits of the dead waiting to be reborn. They pass their time in an Other World that mirrors and exaggerates the mortal plane. Lovecraft’s Dreamlands are similar. Warriors may become Griffons in the Otherworld, thieves may become Boggies or Shadowlords. Faerie is a land where anything that can happen, and usually does. My players have met dangerous Barguests, deadly Faery Trees, sorcerous Frost Giants, and the hated Pixies. Dwarven armor is prized, Elves are feared both for their cruelty and for Elfshot. A monster that has some portion of human anatomy (Centaur, Mermaid, etc.) will probably prove to be a Faerie.
If a creature has horrible or repulsive qualities, it is probably a Demon, which seem to live in a separate or parallel plane to the Otherworld. They may be Faeries changed by the worship of Grom (the one true god) or perhaps they were unknowingly created by the worshippers of Grom. Belief is very powerful. Both faeries and demons can be Bound without permanent loss of Will, unlike animals and aliens.
A strong right arm is not always the best defense against monsters in the Last Empire. It is very important to understand what the creature is if one is to defeat it, and sometimes the best answer is to run away. Adventurers often take some skill in Folklore, either as Monsters or Demonology or Faerie Lore. It has often proved vital to survival.