This film, "The Infernal Caldron" is a single-scene trick film by Georges Méliès, who made many such subjects, which creatively exploited cinematic techniques, mostly substitution splices and multiple-exposure photography. This film is the earliest one that I recall where the filmmaker used multiple exposures to create such indistinguishable ghostly images. I know that he had made ghosts or spirits with the technique before, such as in "A Fantastical Meal" (1900), as had other early filmmakers, but those ghosts that I've seen are distinguished as human looking—only fainter or more transparent in appearance than the living. The trick for the blurry ghost blobs in "The Infernal Caldron" was to alter the lens to go out of focus for their exposure. Méliès repeated the trick for his next film, "Apparitions" (Le Revenant)(1903).
Additionally, this particular trick film remains appealing today because it's available in a vibrant hand-colored print. The color especially aids in making the fire red, as well as bringing attention to the décor and costumes. In the film, the director plays a demon who places people in a cauldron. The out-of-focus spirits fly out of the cauldron and then transform into fireballs. There are quite a few macabre little pictures among Méliès's surviving films, but this is one of my favorites.
P.S. Many, if not most, of Méliès's films were offered to be hand-painted for exhibitors (for an additional fee). Most films from this era are lost, and many of the films that do survive and that were in color have lost their paint over time or only remain in prints that weren't colorized. An all-female staff headed by a Madame Thullier, reportedly, provided the color for all such Star Films, from 1896 or 1897 to 1910, as well as for other French studios. The coloring was done manually in an assembly-line procedure, film-by-film, frame-by-frame, with each laborer specializing in a certain color. Otherwise, some fairground exhibitors may have colored their own prints to cut costs. Later, Pathé's stencil process made coloring easier and more consistent (main source: Frazer, "Artificially Arranged Scenes").
