What's a good ghost story without a ghost? The Turn of the Screw does even better than your average creepy tale – it offers readers two ghosts for the price of one. The supernatural plays a central role in this short story and, interestingly, while the ghosts we see here don't actually do anything, their effect is profound. James's story is horrifying not because of the supernatural elements themselves, but because of the effect they have on the minds of the living, breathing characters. Sure, the ghosts are scary…but even scarier are the things they drive the actual people to do and think.
The supernatural elements of The Turn of the Screw are simply fabrications of the Governess's mind.
The supernatural elements of The Turn of the Screw are undeniably real, even though the Governess is the only character to encounter them (or admit to encountering them).