According to WoWWiki, The Emerald Dream, also known as the Dream and the Dream of Creation, is the verdant realm of the Dragon Aspect Ysera.

It appears to those who travel within it as Azeroth would have appeared without the development of the sapient races, which means that it is what Azeroth would have been if not for humans, elves, and other intelligent creatures.

In essence, this plane shows travelers what their world would be if intelligent races had not cut forests, farmed prairies, diverted rivers and built cities (and had Kalimdor not been shattered by the Sundering). It is a vision of the world as a verdant natural paradise. Tranquil forests stretch away in every direction, and rolling hills and majestic mountains mimic Azeroth’s landscape.

In other words, The Emerald Dream is parallel reality of Azeroth as it would stand today had it been unaltered.  This can make the Emerald Dream a dangerous place, as many unique creatures roam the Dream that do not exist in the current realmof Azeroth (whether they were hunted to extinction, or prevented from evolving to their current state).

Creatures spirits in Azeroth can visit the Emerald Dream  via dreams by leaving their body behind and entering the realm in a dreamform.  Most creatures inside the Emerald Dream move through the realm in normal fashion, although skilled Druids are able to see beyond the physical reality and move quite freely (moving quickly, flying, and even passing through objects).