A paradox is,
"an assertion or sentiment seemingly contradictory, or opposed to common sense; that which in appearance or terms is absurd, but yet may be true in fact."
The paradox in Act I stems from the action of the girls at the beginning of the play. They were in fact in the woods with Tituba, and Abigail did drink a charm, blood, to inflict a curse on Elizabeth Proctor. The accusation of witchcraft is true against Abigail and Tituba, but it is used by both of them to shift responsibility away from themselves and accuse other people, innocent people.
The absurdity lies in the fact that Tituba and Abigail and the other girls get away with their acts of witchcraft. While innocent people are punished because of false accusations.
They start the witchcraft hysteria by pointing fingers at innocent people in the town who have not committed acts of witchcraft. After they begin accusing, and people begin confessing, to save their lives, the witchcraft hysteria takes on a life of its own. It is no longer necessary for the accusation to be true, the accusation alone is enough.
The truth is filtered through the paradox so it is defined by perception. The truth is whatever Abigail and the girls want it to be, they create it to suit their needs. This behavior flies in the face of common sense, especially when the whole town becomes involved in it. Other people use the witchcraft hysteria as a way to exact vengeance on their neighbors.