To dream of dead relative usually represents an aspect of yourself based on their role in the family or your most honest feelings about them.
The fact that your relative is dead in the dream most likely doesn’t have as much meaning as do your most honest feelings about them when they were alive. For example, someone seeing a deceased father in a dream will most likely reflect your conscience or a decision you are making just same as someone dreaming of their father who is currently still alive.
Alternatively, a dead relative may reflect your grief or feelings about their passing.
To dream of a dead relative dancing most likely represents your feelings about how well some area of your life is working out.
Example: A man dreamed of his dead father. In waking life he was making an important decision. His dead father reflected his conscience or decision-making ability. The fact that he was dead had no significance.
Example 2: A man dreamed of his dead grandmother. In waking life he was experiencing a problem that he had prior experience with. His grandmother in the dream reflected the wisdom of past experience or “having been there before.” His ability to override poorer judgment. Her being dead had no bearing on the symbolism.