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The egwugwu is more of a symbol than anything else. It represents the culture and independence of Umufia. Basically the egwugwu are elders in various masks which represent ancestral gods. They function as sort of a justice system in the community presiding over conflicts and judgments.
The egwugwu are actually village elders who are supposedly possessed with the ancestral spirits of the clan. Interestingly, Okonkwo, the protagonist of Things Fall Apart, is also one of them (the one with the springy walk). It is made clear in the novel that the clan members treat the egwugwu with great fear and reverence instead of as just a mere lively spectacle. Together, the nine of them dispense justice to the village. Each spirit represents one of the 9 villages of Umuofia. Their leader is Evi Forest who represents Umeru, the eldest of the nine. This judicial system of the Igbo community was possibly put in by Achebe to show that the so called "barbaric" society of Africa did have its own intricate system of implementing law and enforcing punishment on violators.