An ethereal creature is out of the Material Plane they started from and are wholly within the Ethereal Plane. While within the ethereal plane, they do not interact with the true material plane: They are in a reflection of the material plane that may, or may not, correctly match "reality".
Ethereal creatures are usually completely divorced from the Material Plane. Some ethereal creatures may have powerful abilities that allow them to pierce the veil between the Ethereal and Material in a more exact way.
Ethereal creatures are normally gone completely from the Material Plane, but one of the very few constants of the Ethereal is that movement within the Ethereal is analogous with its Material Plane. If an Ethereal creature moves 50 feet through a door on the Ethereal Plane and then returns to the Material Plane, they seem to disappear from the Material, than reappear in their new location. This can be considered as a form of slow, information-rich teleportation, as the Ethereal Plane frequently has at least some similarity to the material.
The Ethereal Plane may reflect the Material in a fairly accurate fashion, or it may reflect the material as it was in the past, or will be in the future, or an alternate history, such that creatures, objects, even terrain, may be totally different.
Ethereal creatures are capable of moving in any direction in the Ethereal Plane, even up or down, albeit at half normal Walk speed. An ethereal creature can move through solid objects that are reflections of the Material plane, including living creatures. Note that it is possible for there to be Ethereal terrain features, such as walls and ground, that 'exist' in the Ethereal but not in the Material, and such Ethereal terrain is impassable to an Ethereal creature. An ethereal creature cannot see and hear directly onto the Material Plane, but they certainly can see and hear the reflection of their material plane, with wildly varying degrees of accuracy. While on the Ethereal Plane everything looks gray and ephemeral. Sight and hearing on the Ethereal Plane are limited to 60 feet, as the very structure of space tends to 'fog out' any perception beyond that distance.
Force effects (such as Ghost Touch weapons and Force-based spells) and abjuration-based spells and effects on the material Plane almost always affect an ethereal creature normally. Their effects usually extend onto the Ethereal Plane from the Material Plane, but not vice versa. An ethereal creature can’t attack material creatures, and spells you cast while ethereal affect only other ethereal things (even force and abjuration effects). Certain material creatures or objects have attacks or effects that work on the Ethereal Plane.
An ethereal creature treats other ethereal creatures and ethereal objects as if they were material.
Note that the incorporeal condition reflects a creature that has no physical body, but is still within the Material Plane. It may be possible for some Ethereal creatures to project an incorporeal effect into the Material plane.