Yes, it is vengeance that is stalking Salem. Proctor says this because he can see the real reason behind the girls\' accusations. At first, the girls first accuse Sarah Good and Goody Osburn because they are easy targets. But it is Abigail\'s accusation of Proctor\'s wife, Elizabeth, that shows how the girls are using their power to hurt others. Soon people are accused for having ever wronged any of the girls or anyone associated with the girls. Note late in the play too how Giles accuses Putnam of having his daughter, Ruth, accuse someone because they have a lot of land, which Parris can easily claim when they are hanged or jailed on suspicion of witchcraft.
The judges are blind to this however. They foolishly take the girls spectral evidence as hard fact. This ultimately costs innocent people their lives. Fortunately, as in Andover, the community soon realizes that people are being accused for different reasons other than witchcraft and begin to overthrow the courts.
According to Proctor, it is not witchcraft but vengeance which is stalking (walking) the town. In Act 2, Scene 4, he says, "I'll tell you what's walking Salem - vengeance is walking Salem. We are what we always were in Salem, but now...vengeance writes the law!"