I believe that the ghosts are only a hallucination of the governess. I also think that the governess is suffering from a mental disorder, possibly paranoid schizophrenia. Hallucinations are common in paranoid schizophrenia, which would explain the images of the ghosts (which only she sees as both Mrs. Grose and Flora deny seeing the image of Miss Jessel which the governess claims to see). Auditory hallucinations also occur and the governess repeatedly mentions the absence of sound as an indicator of her visions. When she sees Quint in the tower, the birds stop chirping and the leaves stop rustling. She mentions the “dead silence” when she sees Quint on the stairs as the indication that her encounter is unnatural. She also has delusions of persecution, thinking the ghosts will harm the children and then believing the children to be conspiring with the ghosts. There are delusions of grandeur as well, with her seeing these events as an opportunity to be a heroine and win the affections of the employer with whom she is in love.
In addition the governess is clearly repressed sexually, due in part to the strict morals of both the Victorian Era and of her religious upbringing as “the youngest of several daughters of a poor country parson”. The reader cannot help to observe her attraction to the males with whom she comes in contact. After only a brief interaction, the governess is immediately wooed by the children’s uncle. She is fantasizing about him when she first sees Quint’s image in the tower. She is undoubtedly