I found an explanation on Tulpa on Wikipedia. I am still not entirely sure what it is but I think it belongs to the realm of black magic and superstition. Having said that, I believe spirits are not made up but are very real. The Buddha has talked about them and have even described their existence so they must be real. All human cultures talk about ghosts and the unseen. So, it cannot be just a figment of everybody's imagination.
Tulpa (Wylie: sprul-pa; Sanskrit: nirmita and nirm??a; "to build" or "to construct") is an upaya concept in Tibetan Buddhism and Bon, discipline and teaching tool. The term was first rendered into English as 'Thoughtform' by Evans-Wentz (1954: p. 29):
In as much as the mind creates the world of appearances, it can create any particular object desired. The process consists of giving palpable being to a visualization, in very much the same manner as an architect gives concrete expression in three dimensions to his abstract concepts after first having given them expression in the two-dimensions of his blue-print. The Tibetans call the One Mind's concretized visualization the Khorva (Hkhorva), equivalent to the Sanskrit Sangsara; that of an incarnate deity, like the Dalai or Tashi Lama, they call a Tul-ku (Sprul-sku), and that of a magician a Tul-pa (Sprul-pa), meaning a magically produced illusion or creation. A master of yoga can dissolve a Tul-pa as readily as he can create it; and his own illusory human body, or Tul-ku, he can likewise dissolve, and thus outwit Death. Sometimes, by means of this magic, one human form can be amalgamated with another, as in the instance of the wife of Marpa, guru of Milarepa, who ended her life by incorporating herself in the body of Marpa."
The mindstream communion affected by the wife of Marpa in the abovementioned quotation, is an ancient mode of mind transmission (Tibetan: dgongs brgyud) or empowerment (Tibetan: dbang bskur) in the Himalayan traditions, documented in the folklore and anthropological studies of Himalayan and Siberian Shamanism. The Russian Psychiatrist Olga Kharitidi published her direct experience of this phenomenon in the Altay Mountains, where a shaman merged a stream of his consciousness continuum or 'spirit' with hers. This phenomenon is a variation of the spiritual discipline of phowa (Tibetan: 'pho ba) and is often rendered as "spirit possession" within English anthropological discourse.
In mysticism, a tulpa is the concept of a being or object which is created through sheer discipline alone. It is a materialized thought that has taken physical form and is usually regarded as synonymous to a thoughtform.
The term comes from the works of Alexandra David-Néel, who claimed to have created a tulpa in the image of a jolly Friar Tuck-like monk which later developed a life of its own and had to be destroyed.
The tulpa phenomenon is assumed by the consciousness-only doctrine first propounded within the Yog?c?ra school and is part of the Mahayoga discipline of the generation Stage (Wylie:kye rim; Sanskrit: utpattikrama) , Anuyoga discipline of the completion stage (Wylie:dzog rim; Sanskrit:sa?pannakrama) and the Dzogchen perfection of effortless "unification of the generation and completion stages" (Wylie: bskyed rdzogs zung 'jug).