In terms of the words themselves: it's not so much that they are "made up", as that they are not very descriptive in and of themselves… And thus, one person's idea of 'good' can be another's idea of 'bad'. Think "cost savings vs. environmental impact" for one example.
In terms of "good and bad incarnate": Yes, both good and bad exist as universal forces, constantly battling each other by various proxies, and maintaining the ultimate balance across all space time. After all, if only one or the other existed, there would be no way to make sure which it was without its opposite… Similarly, if neither good nor bad existed, then life would be much more unified, and by extension, rather dull.
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