The Cetra (セトラ, Setora?), also known as the Ancients (古代種, Kodai-shu?), are mentioned frequently in Final Fantasy VII, although few Ancients are actually depicted in the game. Those include Ifalna, her daughter Aerith Gainsborough, and the spiritual manifestations of many Ancients within the Temple of the Ancients. The Cetra look identical to regular humans, but are deeply spiritual in nature. According to Sephiroth, regular humans were Cetra who forsook their migratory nature to form permanent settlements millennia ago.
The migrations of the Cetra were a Planet-reverent pursuit of the fabled Promised Land, one conducted by traveling from one area to another and cultivating life as they went. The Cetra had the unique ability to commune with the Planet, an ability which regular humans lost once they gave up their close relationship with the Planet in favor of leisure and convenience.
The Cetra had the ability to guide the flow of the Planet's spiritual energy, this being the means by which they were able to cultivate life on the Planet's surface. The Crisis Core Complete Guide states the Cetra are said to have opened up Lifestream veins in the land, working to make the Planet fertile.
The Cetra were on the Planet long before the events of Final Fantasy VII and long served as its caretakers until their race was nearly reduced to extinction by an extraterrestrial shape-shifting entity. The alien arrived on the Planet some 2,000 years before the events of Final Fantasy VII, crash-landing on the northern continent within a meteorite. The impact site was a massive crater that would come to be known as the North Crater, a wound to the Planet that would not be healed even by the time of the game's beginning.
What was already a bad situation became all the worse once the alien emerged from the impact site and approached the Cetra settlements, gleaning their memories and emotions from their minds and adopting the forms of their dead relatives in order to get close to them. The alien released a virus upon the Cetra (in actuality, its own cellular material), a substance that drove the Cetra mad and caused them to transform into monsters.
A small band of unchanged Cetra united and mounted on a final assault on the being they referred to as "the Calamity from the Sky", sealing its body in the Planet at the alien's point of arrival, the North Crater. The alien would later be excavated by Shinra Electric Power Company scientist Professor Gast Faremis and be mistakenly identified as a Cetra and would be given a name: Jenova.
Ifalna was among the last known living Cetra, and her daughter Aerith is believed to have been the very last (though she is only half-Cetra, as her father was an ordinary human). Because Sephiroth kills Aerith at the Forgotten Capital while she is praying for Holy, the Cetra are now believed to be extinct.
While the party can find the spiritual manifestations of some Cetra in the Temple of the Ancients, which take the form of creatures with bulbous purple bodies and long beards, Aerith explains that those are simply "spirit bodies" of the Cetra, that were left in the temple aeons ago solely to protect it, having lost their true forms. They don't have mind of their own and apparently lost their ability to speak, but can still fully understand Aerith, and she can understand them as well.
Many fans believe the Cetra are actually an alien race, which migrates from planet to planet, due to a line Sephiroth says during Cloud's flashback in the English version of the game: "This Planet originally belonged to the Cetra. Cetra was a itinerant race. They would migrate in, settle the Planet, then move on..." This line may be subject to translation issues and a failure to clarify the interchangeability between "land" and "planet".
Elsewhere, the game's script states through Aerith that the Cetra were born on the Planet of Final Fantasy VII: "The Cetra were born from the Planet, speak with the Planet, and unlock the Planet". The act of "returning to the Promised Land", Aerith also speaks of, is an allusion to the return to the Lifestream, it being the Promised Land of the Cetra. This concept is confirmed by the Hoshi wo Meguru Otome novella in the Final Fantasy VII Ultimania Omega Guide.
In the early plans for Final Fantasy VII's story, Cetra were very different from what they ended up in the final version. Final Fantasy VII Ultimania Omega reveals that in the early story drafts Cetra, or Ancients, were an extinct race, who were said to have written the Book of Jenova - a book detailing the unknown workings of the human brain - and the race who created Materia.
According to legends, Ancients could use magic without Materia, and had an advanced magical civilization. It was believed that the race of regular people also existed at that time, and that there were wide-ranging exchanges between them, or that the non-magical people were made into slaves. Due to the belief that Ancients could use magic inherently, it was rumored that people who harbor supernatural abilities are their descendants.
The spirits protecting the Temple of the Ancients have forgotten how to speak, but in an earlier version the spirit in the room where the player can first buy items from it spoke with an accent sounded like from a rural Japanese area, saying "welcome" and "come again". 
- "Cetra" is an ancient stringed instrument, similar to a lyre.
- The Cetra manifestation in the Temple of the Ancients looks like a typical Black Mage, albeit with a long white beard.