Spirits can create convincing illusions of ghosts in the minds of men.

A debate raged over the theory that demonic spirits could create forms to inhabit. It was deemed inconsistent with the infallible dogma that God was the creator of all things. "If this was the case," it was argued," then how could God allocate even a small realm of creation to the devil?" On the other hand, the existence of ghosts was so widely accepted, there had to be some consistent explanation of the phenomenon. To resolve this issue, the more liberal Protestant wing came up with the theory that demonic spirits could not create material or objective forms, but they could create the illusion of those forms in the minds of the people they haunted. Being a Wittenberg student, himself, Horatio accepts this notion, and addresses the ghost from the beginning as an illusion.

In Tony Richardson's 1968 production, the ghost does not appear at all. We see instead an unidentified source of light to represent it, which underlines the theory that its presence is merely in the minds of the viewers.

The influence that the devil could exert over the minds of men was believed to be greater if the person suffered from certain conditions such as melancholy, loss of faith, or moral despair. James I seeks to document such a case.

Amongst the Gentiles the Deuill vsed that much, to make them beleeue that it was some good spirite that appeared to them then, ether to forewarne them of the death of their friend; or else to discouer vnto them, the will of the defunct, or what was the way of his slaughter, as is written in the booke of the histories Prodigious. And this way he easelie decieued the Gentiles, because they knew not god: And to that same effect is it, that he now appeares in that maner to some ignorant Christians. For he dare not so illude anie that knoweth that, neither can the spirite of the defunct returne to his friend, or yet an Angell vse such formes.   --James I,Daemonologie, iii,i,pp.60-61.

Reginald Scott jokes that in almost all cases, it is the demonic spirits that exercise the power to appear to men. What, he asks, has happened to the good ones? Hamlet, himself, repeatedly states that the spirit that he has seen could be of divine or demonic origin, and he tries to devise a test to determine which it is. In England, as throughout late 16th century Europe, it was more or less a matter of faith, that the motivating force behind the apparition of spirits was evil. When Ludwig Lavater, for example, speaks of the appearances of spirits, it is almost always for evil purposes.

VVhether the Diuell haue povver to appeare vnder the shape of a faithfull man? Bvt thou doest demaund whether the Diuell can represente the lykeness of some faithfull man deceased? Hereof we neede not doubt at all. For in the second Corin. II. Saincte Paule vvitnesseth, that Sathan trnasformeth hym selfe into the shape and fashion of an Angell of light. Sathan by nature is a spirit, and is therefore tearmed an Angel, bicause God vseth to send him to bring that thing to passe which he thinketh best. So in the second of kings. 22. chapter an euill Angell was send forth to Ahabs destruction to be a lying spirit in the mouthe of 400. false prophets. Thys was an Angell of erroure and darkness:... If Sathan be then so skillful, can he not counterfaite and fayne him self to be some holy man, by resembling his words, voice, gesture, and suche other things?  -- Lavater, II,ix,pp.140-141. That euill spirits are often seene, and that at this day they shewe themselues in diuers forms, to inchaunters and conjurers, and to other men also, as well godly as wicked, both histories and daily experience doth witness.  - -II,xi,p.149.

In the end, James I agrees. He states that the devil's primary motivation when he appears to people is the loss of their soul or their body. In particular, he warns that they are like to draw the haunted to such dangerous places as the edge of a cliff - a concern which is also stated by Horatio.