I'm not sure traditional Buddhist concepts apply to Touhou's conception of impurity, actually. Whenever impurity has been mentioned, it's always been in relation to life and death. As explained by Toyohime, the Earth itself was once a pure land, but the cycle of life and death in nature slowly corrupted it until it could no longer be called such. The most straightforward definition was given in CoLR chapter 6:
The "impurity" that the Lunar Capital detested was life and death. They believed Earth was a world where simply living invites death. There were even those who called Earth a land of impurity, where every being had to compete to live, and the Moon a "pure land" where that filth had been purified. A world without life or death is the most beautiful thing, but it's still different from a world which had nothing in it. A world where one did not need to take from others to live and could live by what they had made themselves. That was said to be an ideal world.
But again, the particulars are largely up to personal interpretation, so I'm not saying that idea is right or wrong.
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