The Coexistence of the Living and the Dead is the 4th chapter of Tsubasa World Chronicle: Nirai Kanai-hen.
The chapter opens with Sakura inside the underground reservoir in the Clow Ruins. She seems to be in trance and also she seems to be having a vision, as she holds cherry blossoms. Yukito walks in on her, commenting that she's had a vision about Syaoran, and made it into the Dream World on her prayers. She agrees, knowing that he would choose to help with the situation in Nirai Kanai. He tells her it's okay, since Syaoran already knows that there's someone [Sakura] waiting for him and praying for his safety.
The scene switches back to Syaoran and his group, where Mokona reflects on how the "Goddess" said that dangerous things would take place on the island. Tachibana continues to explain that this place is still Nirai Kanai, a land located in the east, with the best crops, also called "The land of the gods". People would believe that there are gods living on the island, and prayed to them. She [Hana] serves as a bridge for communicating them with each other. Fai then says that she's a miko (priestess). Sakura disagrees, stating that she's more of a divinity. She was chosen to be the goddess princess who protects the island for a determined time.
Syaoran reflects on how she's similar to a "kumari".
Then Hana asks him about him meeting different worlds and having learned a lot of information. She continues to explain that Nirai Kanai is a place where both the dead and the living coexist, and they do exist in different dimensions. She shows Syaoran a forest in the far end, pointing that it is where they must go. Fai and Kurogane are unable to see it, but they agree to join him in this quest.
Tachibana wonders if it's okay to let them go alone, but Sakura replies to him that they are strong enough to endure the journey and come back. He rebuffs this by saying he doesn't care about where they'll return or not, he only cares if they can solve the problem. Hana disagrees, pointing out that he does care that they will get hurt. She continues to tell them all they can do is wait and believe in them, like Sakura does.
The group arrive to the far-end forest riding the dog-shaped spirits from before. As they land, they are knocked down into the water. They surface, but wonder how it became night all of a sudden. Out of the blue a water monster emerges and Kurogane takes his sword out, ready to fight.