It seems to be the "raw, unformed stuff" of the Daziarn Plane. Basically, those with power to shape the plane can form the Neverness into their own realms. Of course, given the nature of the Daziarn and the difficulty in bouncing from one realm to another, it can be insanely difficult and haphazard traversing the Neverness, entering it, and especially leaving it. Grey Star needed Magitek to make the transition, and Lone Wolf needed literalDivine Intervention.
Interestingly, a lot of the creatures considered "undead" don't seem so. For example, the Akraa'Neonor from Book 3 is considered undead... and it's essentially Shuma-Gorath. Huh?
We don't know by which process Vonotar created it. And given some of the things we glimpse in his laboratory, it's probably best to stay in the dark.
The existence of the Stone Effigy implies that the creature was there long before Vonotar arrived. Vonotar may have simply raised it from the dead.
I believe for a lot of these things they invovle modifying corpse or dead creatures, and therefore qualify as undead. Failing that, maybe the Sommersword is super effective against otherworldly evil things or some evil creatures (since it was made to oppose Naar).
Why can't Kekataag use his psychic abilities against you in the final battle?
It's the end of the series; Lone Wolf's Psychic Block Defense is probably so strong at this time it isn't even worth trying.