What is Buddhism view on Ancestor Worship? Are there any references which talk about it? Do ancestors occupy any plane/realm ? How to explain the ancestors who come in dreams? Is it manifest of mind?
Ancestor worship, or veneration of the dead, is more of a cultural phenomenon than a religious one (though religions can also influence culture, so it can be difficult to pinpoint the source of different religious/cultural elements).
The practice is most common in countries that also happen to have a larger share of Buddhists, though there's not a huge connection between Buddhism itself and the practice.
Śrāddha is referenced in the Pāli canon, though in a Buddhist context the word has a meaning closer to the notion of "faith". But the word itself has an earlier meaning in the Hindu context, where it was more specifically applied to ancestor worship:
In the Hindu religion, it is the ritual that one performs to pay homage to one's ancestors (Sanskrit: pitṛs), especially to one's dead parents.
Given Buddhism's origins in India, it's easy to see the connection between the cultural practice of ancestor worship and the linguistic fluidity of a single word used to describe both the practice and an early Buddhist concept. Ultimately, though, there doesn't appear to be any direct call for ancestor worship within Buddhist doctrine (which makes sense, given the overall emphasis on our present actions and not clinging to the past).