At the end of the movie "Places in the Heart" people that were dead are in church with people that are alive. Why are they there, what does that mean?

This movie (which won Sally Field an Oscar) is about an unlikely trio - a widowed mother, a black man and a blind man - keeping a farm running to survive in a difficult time and place. Many films about people overcoming adversity end with a montage of flashbacks to remind the viewer what the characters have been through.

Rather differently in this film, the director has reminded the viewer of the early part of the film by showing characters killed praying alongside the living. This also serves to hint at how things might have been different with tolerance, understanding and so on.
Doubtless the scene is poignant, but this device's effect is diminished somewhat by its tendency to leave the audience feeing baffled and bewldered rather than uplifted as you have indeed shown!