I didn't think I'd be able to see it. My grandpa said he saw some kind of island floating in the sky. Surely that's impossible...Guard
The Celestial Plain (「タカマガハラ」?; Takamagahara; High Plain of Heaven) is home to numerous unnamed gods and the Celestials as well as Waka and Amaterasu in both incarnations. Not much is known about the land, nor can Amaterasu visit it during the game, leaving very little information to go on.
Although one image is ever clearly given throughout the story, the Ark of Yamato's viewing screen provides a clear shot of what the landscape looks like, allowing for further inference.
Among the few major landmarks that are clearly visible are a forested mountain range, something resembling a large lake or an ocean, and a single, grand mountain, looming in the distance, watching over the land from its sky-kissing peaks. Beyond these few visuals, not much more is known about the layout of this location. It is however, supposedly visible from a tower atop Kusa Village but how to make the island in the sky appear is unknown.
As far as travelling to this location goes, there are two know ways, and another that is purely theoretical. The first, is through the no longer active gate on Watcher's Cape. How this gateway was disabled is left unknown, although it could be a matter of time, given how much of the structure is in ruin.
The second, rather obviously, is through the use of the Ark of Yamato
Home to the gods of the realm and the Celestial race, the Celestial Plain was at peace, silently watching over and protecting the world below. Long ago, a catastrophe struck the people of the Moon, after which a man from the moon brought the Ark of Yamato to the Plain during his escape. The Ark was summarily enshrined  there and for yet another unspecified length of time, the Plain was at peace.
However, the attack of Orochi was not far off. Using its eight heads, it set the plain ablaze. Amaterasu, in the form soon to be nicknamed Shiranui dragged the giant serpent down to earth at the instruction of Waka while he gathered as many Celestials into the Ark of Yamato in an effort to spare them. However, hidden within the depths of the ship was Yami and its demonic army, lying in wait to devour the innocents aboard.
Upon Yami's defeat, the same two who survived the attack on their home--Amaterasu and Waka—began their journey towards the Celestial Plain, with the hopes of restoring the land to its former glory and beauty, all while ushering in a new era of peace for the mortal world.
In Japanese, the Celestial Plain is known as Takamagahara. The real life legend of Takamagahara explains that when the world was first being formed, all of the heavy elements fell below and became (「葦原の中つ国」?; Ashihara no Nakatsukuni; Central Plain of Reeds), which is better known to players as Nippon. The lighter, pure elements floated towards the heavens and became (「高天原」?; Takamagahara; High Plain of Heaven) as historians understand it to be today. Long after its creation, real world goddess Amaterasu (Shinto deity) was assigned to rule over the land, extending her power to the world of Nakatsukuni below as well.
The landscape of the plain is still something of debate to this day. However, the attached image shows where some of the locations mentioned in legend are supposed to be, such as Takakurayama(高座山), Ōtaki (大滝), and the River of the Heavens (天の川). The last one especially brings up the question as to whether or not the River found in Ōkami is a part of the Celestial Plain that remained unscathed or even was restored to some extent. However, no further evidence is given, leaving players wondering.
- ↑ (Guard) I wonder if I'll be able to spot that floating island in the sky. My grandpa said there's a land up there called the Celestial Plain. That's where all the great gods are supposed to live. I don't know, though. It's all a bit far-fetched, if you ask me.
- ↑ "(Watcher) This is Watcher's Cape. It's said the gods once used this place to return to the heavens. At night, this place offered a great view of the starry sky. Even the whirlpool galaxy was visible from the cape's tip!"
- ↑ (Sado) Why did such tragedy befall us? This ark was built by the lunar civilization as a rescue boat. It had been enshrined in the Celestial Plain for many years
- ↑ (Waka)You waited for the day that Nagi, the Chosen One, was born
- ↑ (Waka) Ha ha ha ha ha... That tickles! Down! Heel! You're going to lick me to death! Well, Amaterasu! Time to embark to even stormier seas! Making the world a better place is never easy! You must return to the Celestial Plain and set things in order. Only then can you usher in a new age of peace in the mortal world. Our journey is far from over, ma cherie!