The Afterlife is a place where humans go after dying. Time in the Afterlife operates according to the Jeremy Bearimy Timeline. The Afterlife was created by the Makers of Light, Darkness, and Everything.
The Afterlife is a system that rewards and punishes humans for their actions during their time on Earth. Most humans go to either The Good Place or The Bad Place, or in some rare cases (such as Mindy St. Claire), The Medium Place.
In Janet(s) it is stated that the four humans, upon entering the Afterlife, are the first humans to not immediately go to the Good or Bad Place, so presumably Mindy was sent to one of the realms–probably the Bad Place–before The Good Place committee vouched for her, leading to the creation of the Medium Place).
It is also stated that Abraham Lincoln did not go to the Bad Place, but he hadn't gone to The Good Place (because it was also revealed in "Janet(s)" that no human had gone to The Good Place in 521 years), so he was possibly put in another Medium Place–a fate even more probable because the Judge had offered to put the four humans in Medium Places in "Somewhere Else."
However, Lincoln could have also gone to the Bad Place, as Michael does not know offhand who had gone to the Bad/Good Places (if he did, he would not have had to ask Neil), and to say Lincoln had not gone to the Bad Place may seem like a no-brainer to humans. Lincoln not being in the Bad Place may have been inconceivable according to the system. Another possibility is that Lincoln did go to the Good Place and the Bad Place Employees did tamper with the system like Michael said.
The Afterlife was created by "the Makers of Light, Darkness, and Everything", who also created the Janets which serve as a foundational mainframe for the Afterlife. The Afterlife point system seems to lean toward giving the Bad Place more humans, a fact made clear by the overwhelming number of humans sent to the Bad Place and the fact that human kindness seems to be worth approximately 10,000 points while human evil seems to be worth -1,000,000 points (a fact demonstrated by the case of Og and Grog).
The Afterlife point system functions by assigning positive or negative values to every action humans do on Earth, which are computed in the Accounting Department before being sent (via chute) to either the Good or Bad places. When humans perform actions which are new, the information is checked by randomly selected accountant and assigned a point value based on their evaluations. 99% of modern new human behaviors are categorized as "Weird Sex Things," and assigned a negative point value.
In cases where the Accounting Department is unsure which location to send the humans, or when the Good Place or Bad Place's Committee or High Council (respectively) claim a human that has been sent to the opposite realm, the Judge (Gen) is brought into the case–one example of this is the creation of The Medium Place.
Due to Michael's experiment with Neighborhood 12358W, he came to realize that the point system was deeply flawed. At first he believed that it was because the Afterlife did not allow for human improvement (which was certainly part of the issue), and convinced Gen to run an experiment in which the humans were entered into a new timeline in which they never died.
The result of this experiment was never made clear, as Michael's tampering and the humans' eventual discovery of the Afterlife invalidated the results. However, it is implied that without Michael's help the humans would not have improved; and even with his help they frequently backslide (Eleanor, in particular). Michael and Janet then visited the Accounting Department and discovered that no human had gotten into the Good Place in 521 years. Also, even Doug Forcett would not get into The Good Place (because his point total was around 500,000–about 400,000 points off the required point total to enter The Good Place, toward the end of his life). He, Janet, and the humans then escaped to The Good Place to speak with the Committee.
People get assigned negative points for things they aren't aware of; even buying food or clothes gets negative points for pesticides and sweatshops, so no matter what they do, humans get screwed over. As Michael points out, the system is lopsided because of this; damning everyone to The Bad Place, regardless of their morality.