Nightmare are a type of creature who usually feed off the fear of other creatures. They usually use Dark Element based abilities. Much like Guardians, they can use the power of Grace, which is usefull to them since they're constantly being fought by Guardians.
The term "Nightmares" was just recently adopted by Flora. It actualy changed various times, it was changed due to story changes or religious reasons.
The first term it was known as were "Demons". This was changed due to Religious reasons. At this time Guardians also were under the term "Deities". The second term was short lived, Guardians were known as "Forces of Mechanics" and Guardians respectively were "Forces of Nature". This was changed, since the series of GALAXY changed soon after this time.
There are a bunch of confirmed Nightmares, there are quite a few.