That’s it exactly! It’s a tradition of sorts.
You could say it was sort of a deal between the two species? Shivares are an extremely low-ranking species and had a lot of difficulty functioning in a time when human forms were extremely common. Ly’s showed up and basically made them a deal of “Agree to have your people work for us, and we’ll share our magic and give you human bodies too.” They agreed, were given the ability to walk around in humanoid appearances, and in return every now and then one would be ‘sold off to slavery’.
Though they’re treated pretty damn well for slaves. But still.