Summary
The governess finds time eventually to talk to Mrs. Grose about what had happened the night before, when she found Miles out on the lawn after midnight. Mrs. Grose gives the governess the sense that she believes her, but she is unwilling to fully believe the culpability of the children in what the governess sees as an atmosphere of evil.

On reaching Miles out on the lawn, the governess asks him what he is doing outside in the middle of the night. Miles mischievously replies that he did so in order that she would think him “bad.” He seems delighted at the prospect of being considered “naughty,” which is the exact opposite of what she, Mrs. Grose, and the entire household believe. He says that he was in collaboration with Flora, who was supposed to get out of bed and look out the window in order to disturb the governess from her sleep, look out the window to see what Flora was looking at, and then come to get Miles, which is exactly what happened. The governess is horrified that Miles would risk getting sick in the night air, which Miles believes simply added to the joy of the escapade.

In all this, Miles does not mention Peter Quint or Miss Jessel at all. Yet the governess believes that both children have continued contact with the ghosts of the former servants. She states that in reality, the children have not been good, they have been “absent,” leading a life of their own with the ghosts. Mrs. Grose cannot understand why the children would do such a thing, to which the governess replies that they do so because of all the evil that Quint and Miss Jessel put into the children while they were alive. Mrs. Grose admits that the children were “rascals” when it came to the servants when they were alive, but wonders why they continue to meet with them. The governess is convinced that the ghosts are determined to lead the children to “the other side.” Each contact is in order to shorten the gap between this world and the next.

Mrs. Grose decides that the children’s uncle must be informed of what is going on, despite his orders not to do so. The governess is reluctant because she does not want her employer, towards whom she is still harboring romantic feelings and hopes, to become irritated with her. She threatens Mrs. Grose that, if the latter inform the children’s uncle, she will leave the house on the spot.

Analysis
The psychological possibilities of the existence of the ghosts becomes more of a possibility, as the governess and Mrs. Grose analyze the situation. Mrs. Grose still has not seen the spirits of the dead servants, though she chooses to believe that the governess has done so. It is only the governess’s belief that the children see them, though in the narration neither child is described as reacting to their presence at all. In this plot device, James calls into question in the reader’s mind the true nature of the ghosts.

The evil nature of the servants is attested to by Mrs. Grose. Peter Quint had an odd relationship with Miles, as did Miss Jessel with Flora. The questions that are brought up concern the exact nature of those relationships. The physical beauty of the children, their affectionate and passionate natures, and the seclusion of the caretakers with the children, gives rise to the possibility of abuse or molestation. The entrapment of the children, with the servants making them dependent on the adults for all care and attention,...