Kami literally means God in Japanese. They're definitely not just normal spirits.
Kami directly translates to Spirit. Though sometimes synonymous with god depending on context it is a distinction that is important to make.
Wikipedia has a great summary of the term. "Kami (Japanese: 神?) are the spirits or phenomena that are worshiped in the religion of Shinto. They are elements in nature, animals, creationary forces in the universe, as well as spirits of the revered deceased. Many Kami are considered the ancient ancestors of entire clans, and some ancestors became Kami upon their death if they were able to embody the values and virtues of Kami in life. Traditionally, great or charismatic leaders like the Emperor could be kami."