Well, seeing as The Turn of the Screw was published right at the tail end of the Victorian era, a period infamous for its prim, proper exterior and wild, often truly bizarre interior, you can bet that there are some very, very odd things going on underneath its surface. James shows us both the proper and decidedly improper sides of society here, and focuses on the way in which these two sides of the same coin grate against each other. The more you read repression into the story, the crazier it'll get – that's a promise! Forbidden love, falls from grace, corrupted innocents…trust us, it's all here.
The ghosts are actually a manifestation of the Governess's repressed desires, and the entire story emerges from her insanity.
The repressed desires of the Governess towards her employer play out eerily in her relationship to Miles.