This scene, in which the stranger addresses the crowd of townspeople in the forest, is the climax of the story. What Goodman Brown sees before him are those, including his young wife Faith, whom he had assumed paragons of virtue, side by side with others who represent sin and immorality. The stranger declares that virtue does not exist--that it is an illusion, and that the true nature of all those gathered in the forest is evil: that they in fact worship him, the devil.
It is up to the reader to determine whether the whole scene is itself an illusion--a dream or hallucination in which Goodman Brown is either projecting his own inner thoughts, or a false message that is being foisted upon him by the stranger:
Had Goodman Brown fallen asleep in the forest, and only dreamed a wild dream of a witch-meeting? Be it so, if you will.
Hawthorne, as in many of his tales, does not give us an ultimate answer. But the overall point of the story, in my view, is that all humans have within themselves the capacity for both good and bad. No one is completely pure and innocent, for humanity is by nature imperfect. At the same time, those judged evil in the harsh moral climate of Puritan New England, as Hawthorne indicates in his writings in general, are in most cases no worse than anyone else, and the people who judge them--such as the ones who judge Hester Prynne in The Scarlet Letter--are usually hypocrites themselves. Goodman Brown, in rejecting all of mankind for the rest of his life after this one night, is taking the wrong message from the dream. If we reject people because of their imperfections, Hawthorne is saying, we are rejecting and condemning everyone, including ourselves.