If, as so many readers have, you view this novella as Henry James's entry into the field of the horrific and the macabre, you will be sorely disappointed. The first person presentation by its main character, the live-in nanny/teacher, gives us an endless series of haunting, yet laborious, internal thoughts about how she views the world about her. Yes, she does perceive the existence of two malevolent spirits that are attempting to overtake the children in her charge and, yes, she sees herself as being the only person who can save them from this demon possession and, yes, the final sentence of the book which relates the death of Miles in her arms could be interpreted as being caused by his spiritual fright (?!). But, no, this is not a book that has anything to do with an unseen evil spiritual world which exists outside of our own internal consciousness.
This is a book about the inner psyche of a person who is undergoing a severe emotional breakdown and, being so, it deserves all the merit that it has received. Alas, our heroine is, at best, a paranoid schizophrenic. She is the only person who has a view of these spirits while her only companion, the house maid, after continual coaxing, will only claim that the children to have said a few inappropriate things. She is the only one who is able to develop this entrancing scheme about prior relationships the children and the now dead subjects and presently entertains how they had become evil and seek to overtake the souls of the children. She is the one, through her rambling and droning thoughts, that continues to reinforce the ego building concept of needing personal strength to see herself through this ordeal. She is the one who refuses, until the very end, to discuss with the children not only her perception of these spirits but also why Miles was expelled from his previous school (his answer to which was diffuse, at best). The house maid, herself, while acting out of class respect to the teacher/nanny never fully engages in our heroine's fantasies and, most of the time, continues to support the children. And finally it is in her arms that Miles dies. Rather than `spiritual fright', did she smother him in order to protect him from being captured by the delusions that she had created. I, as a serious reader, feel most certainly that she did. In then end only his sister that survives her evil fantasies for she has been whisked away previously due to the emotional fear she has of her teacher.