Possession is the psychokinetic abiility for a spiritual entity to take control of, to animate, to possess another living being's body.
On Teen Wolf, a species of being naturally capable of possession is a kitsune, specifically a nogitsune's talent of Kitsunetsuki.
Banshees are also capable of being possessed by spirits of the dead under some limited circumstances. In Season 1, Peter Hale bit Lydia Martin to trigger her latent banshee traits and was able to connect to and have a limited amount of control over her in Season 2.
It is unknown whether this was solely from having her powers awoken, or from Peter's bite creating a link between them, or from Peter being recently dead instead of long-dead, or a combination of any or all of these factors.