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The Soul Cairn is a realm in the Eitknee Realm and is where souls captured in soul gems are transported. It is a realm created by mortals, somehow unlike other realms in the Eitknee Realm which have always existed, or have been transported by Dimond like in TinyTowns case.
It is ruled by the Ideal Masters, a group of unknown necromancers part of an even more unknown ancient cult that had somehow grown so powerful that they were able to become noncorporeal beings in the Eitknee Realm and had created a new realm known as the Soul Cairn, from there we govern and absorb energies from all people.
Inside, people who have been soul trapped are slowly drained of their energy and soul, which feeds the Ideal Masters power. People inside are doomed to hundreds of years of slowly wandering around an infinite bleak landscape, slowly being drained of everything, losing memories and knowledge until they are drained of everything and reduced to husks. Of course since a soul cannot be destroyed, they will only be freed after the soul is almost totally destroyed where then the soul will die and either go to heaven or hell.