Shape-shifters were humans who could change their forms to however they liked: any variety of human or Fae as well as animals and beasts, some shifters are powerful enough to change into extinct sea dragons or wyverns created by the Valg. Rowan refers to Lysandra as a full powered shape-shifter which suggests that some shape-shifters are only able to change their human form rather than change into animals. They relied on magic, the larger and more complex the creature the more magic they needed, to build up the mass required for the forms. Shifters were always feared and mistrusted, they were known as spies and thieves and assassins able to demand any price for their services; the bane of courts across the world, so feared they had been hunted nearly to extinction even before Adarlan had banned magic. When magic vanished all shape-shifters were stuck in whatever form they were currently in. It is possible for shifters to forget their original form.
Aelin suspects that Erawan's Bloodhound might have originally been a shape-shifter.