The Great Spirits are characters who make the magical changes; they have the spirit of Sitka turn his younger brother Kenai into a bear in Brother Bear as punishment for killing an innocent bear that didn't kill Sitka and Nita into a bear in Brother Bear 2 because she wanted to marry Kenai instead of Atka.
The Great Spirits were believed to be the "gods" during early American formation and also in Canada. With high beliefs of the animal transformation after death, the spirits appear for the first time to Kenai in the form of several animals appearing in the bright colored sky above him. Sitka, Kenai's brother whom passed was transformed into an eagle for the guidance he must give in honor of his totem. Kenai is to create more love and care for others, of which he receives the bear totem from the Great Spirits.
All the animals in the Great Spirits represent the totem of a person when he/she was alive. They show that animals too are alive and can have feelings just as a man. In Kenai's case, a man can learn more from the life of animal. All humans and animals equally have spirits.
Each color that is shown in the Great Spirits represents different things.
When the explosion and pool of blue is shown it represents the sky, water, women, lightening, sadness, etc.
Red shows sunset, war, day, blood, etc.
Yellow shows sunshine, day, and dawn.
The light green shows rain, plant life, earth, and summer.
The Spirits seems to know what others are feeling or know and change the events of their fates. In Brother Bear 2, Nita wanted to marry Kenai because of the Amulet he gave her when they were kids, when she was about to marry Atka, the Spirits intervened, showing she wasn't meant to marry Atka.
When the Spirits appear, humans can understand what animals are saying when in their presence. Nita heard Kenai's words, and Chilkoot question that he heard him talk and understood Rutt and Tuke.