The narrator asks, “Had Goodman Brown fallen asleep in the forest and only dreamed a wild dream of a witch meeting?" What do you think? Why? What part of the story is a dream and what part is real?
I'll answer the first question of the two that are being asked.
Personally, yes, I believe that events of the story really happened to Goodman Brown. I do not believe that he experienced a dream. I will admit, there are parts of the story that seem like a dream. For example, when the devil's staff turns into a serpent and then Goodie Cloyse and the staff disappear is quite strange.
So saying, he threw it down at her feet, where, perhaps, it assumed life, being one of the rods which its owner had formerly lent to the Egyptian magi. Of this fact, however, Goodman Brown could not take cognizance. He had cast up his eyes in astonishment, and, looking down again, beheld neither Goody Cloyse nor the serpentine staff, but his fellow-traveler alone, who waited for him as calmly as if nothing had happened.
The part of the story when Goodman Brown grabs the staff and quickly moves through the forest seems like a dream too.
And, maddened with despair, so that he laughed loud and long, did Goodman Brown grasp his staff and set forth again, at such a rate that he seemed to fly along the forest path rather than to walk or run.
I've had dreams of flying, so it does sound like something that isn't real. But I have also been driving myself somewhere, arrived, and then been surprised at how quickly I got there. At times, the details of the drive are often fuzzy too. That sounds terrible of me, but it does show that waking moments of reality can feel dreamlike as well.
As a reader though, I'm not willing to accept parts of the story as a dream and other parts as reality. It's either all a dream or all reality for Goodman Brown, and I lean toward the events being all reality.
A large part of my feelings on this are coming from my own faith based background. I believe in heaven and hell and that the devil has real world power. Many religions throughout the world believe in similar supernatural forces being able to affect waking reality. The staff to serpent "trick" in the story is a direct reference to the story of Moses and his work to free the Israelites from their Egyptian captors. I completely understand reading the entire story and interpreting it as if Goodman Brown dreamed the entire thing. In fact, I think it is easier to justify and understand the events of the story, if you believe they are all part of a dream. I just don't interpret it that way myself.
At the end of the story, it doesn't really seem to matter whether or not Goodman Brown dreamed the witches' meeting because he believes it was real, and it changes him for the rest of his life. When he sees his wife, Faith, again, he "looked sternly and sadly into her face, and passed on without a greeting." This is very unlike the feelings he had before he saw her (or dreamed that he saw her) in the woods the night before; then, he loved Faith and felt somewhat guilty for leaving her alone for the night. For the rest of his life, Brown remained "A stern, a sad, a darkly meditative, a distrustful, if not a desperate man [...]," and "his dying hour was gloom."
If it was a dream, it seems to have begun after Brown left home and sometime after he entered the forest, as his choice to leave Faith behind is crucial to his character's change. As he walked into the forest, he thought, "she's a blessed angel on earth; and after this one night, I'll cling to her skirts and follow her to Heaven." In other words, he purposely decides to abandon his Christian faith, represented by his wife, Faith; he intends to have this one last night of sin (he obviously knows he's doing something bad) and then he will follow his wife's good example. However, this is not how faith works: one cannot simply abandon and then resume it whenever it is convenient. It seems to be this choice, to turn his back on God, even if just for one night, that leads to the loss of all faith, and his inability to see Faith the same way, in the end. Again, if Brown experienced a dream, it seems to end when he finds "himself amid calm night and solitude [...]," just after he orders Faith to resist the devil and when he suddenly finds himself in the "chill and damp" night, alone.