For long, it has been theorized that WandaVision is highly inspired by the House of M comics storyline where a grief-stricken Scarlet Witch altered reality. Given that the MCU version of the superhero possesses the same reality-bending prowess, the obvious deduction is that Wanda created the fake construct we see in the Disney+ series to cope with Vision's death. But there is another, much darker, possibility that the events of the past episodes portray- that Wanda didn't willingly create the artificial bubble inside the very real town of Westview, but someone else is using her powers to control her as well as the make-shift town and is constantly reprogramming the people in it.
[The following article contains major spoilers from WandaVision. Stop reading if you are yet to begin binging the show.]
We are still all for the theory that Wanda created an illusion of Vision as they are both connected by the Mind Stone. And yes, she does seem to have some control over what is happening (when she reverses time). But as for the rest of the town of Westview and its oddly behaving townfolk, who are jumping through the decades with the "unusual couple", it is becoming more and more obvious that someone else is pulling the strings.
Yes, Wanda may have "created" Vision, but the sitcom-reality and the people (who seem to have a somewhat glitched awareness of what is happening) in it were all formed by a second person, who wants Wanda to have kids. Even Wanda has forgotten her past and seems to remember it in bits and pieces. Because if our deductions are right, the third episode of WandaVision may have hinted that while Wanda can create living beings, she has can't control them or use her magic on them in any way}.
But before we explain that last sentence, let's revisit the events across the three episodes that establish that Wanda isn't the one helming her warped, sitcom-reality. There is a second entity who is drawing from Wanda's powers to keep up the illusion as in the moments she is distracted, the facade drops and things, as well as people, start "malfunctioning".
Mr. Hart and Mrs. Hart
In the first episode, Vision's boss, Mr. Hart and his wife come down to their house for dinner. Had it been a genuinely fake world with Mrs. Hart wouldn't have grilled Wanda with questions like when she got married and what she didn't have kids. This proves that while the sitcom-reality is made-up, the people are very real, on some level they are aware that they are trapped, and know that Wanda is the anomaly.
Mrs. Hart's question put off Wanda who starts realizing that something is off with the place and the life she is living. She is distracted which tampers with her powers that are being used to keep up the illusion- they start glitching and hence Mr Hart starts choking. His wife continues saying "Stop it" first in a light tone to her husband and then in an imploring tone to Wanda, as if she knows that her questioning the fake reality is making her husband choke.
What happens next? Well, Wanda breaks out of her stupor and asks Vision to help Mr. Hart. By now, we know that Wanda is more than capable of conjuring things out of thin air and making them disappear in this weird world. This puts up two possible facts- a) she made Vision help Mr. Hart, which means the synthezoid is under her command, b) But other people are not under her control or else she could have just magically removed whatever Mr Hart was choking on as she did for Vision in the second episode. Again, she created him, thus she can control him and use her powers on him. But the pseudo-reality is not her creation and she can't use her powers on its people who are being moved around like puppets by someone else.
As for the Harts, they instantly snap out of his near-death experience and are instantly jolly- it's not as if they have been forced to act that way, they looked like they instantly forgot what happened and instead remembered the last few seconds differently. Here is another odd point to focus on- the couple instantly left, as if at that point someone programmed them to leave early in case their presence made Wanda linger on the strange occurrence.
If you have watched WandaVision diligently, you'll notice that the strange manner in which the events mentioned above enfolded, happens again.
Wanda's interaction with Dottie
Many theories floating around mention that Dottie, Westview's by-default Queen bee, started asking Wanda questions after the outer world managed to breach this fake reality for a few seconds via a radio broadcast. If you believe that too, watch the episode again because Dottie starts acting weird before it- she claims that she has "heard things" about the couple and when Wanda tries to assure her that she means no harm, Dottie stresses that she doesn't believe her. Again, Dottie shows a level of awareness, like she knows that something is wrong with Wanda and Vision.
Her aggressive behavior acts as a trigger to once again confuse Wanda and just like before, the fake reality malfunctions. The outside world, most probably S.W.O.R.D., gets through, Dottie breaks her glass, starts bleeding a bright red in the monochromatic world, and is suddenly afraid of Wanda. On the other hand, Wanda is too shell-shocked to do any damage-control on her own- it's not that combo of angry-scared she is later in the episode when she sees the beekeeper and rewinds time. So, it's possibly not her who fries the radio, breaking the moment.
And like it happened with the Harts, Dottie is reprogrammed- not only has she forgotten that last few weird seconds, her earlier misgivings about Wanda have disappeared too. Did you notice how Wanda is surprised by the sudden change in Dottie's behavior? Now, would that be her expression if she was the one who wiped the slate clean? Nope.
The strange events in Episode 3, "Now in Color"
There is a moment in the episode when the couple's neighbor, Herb while cutting his shrubs starts sawing the wall as well and doesn't stop even when Vision points it out to him. We agree that at this point, no one is grilling Wanda with questions or accusations. But she is going through an insanely accelerated pregnancy with all the painful symptoms all packed into less than 24 hours. So, in a way, she is distracted.
When Geraldine visits Wanda, we see that the stork she was painting in her soon-to-be-born children's room has come alive and is roaming their living room. Wanda tries to make it disappear twice, but each time it shrugs off her magic. This is not only a nod to the fact that Wanda's magic can create living beings (like her twins) but once again establishes that her powers don't work on living beings.
The next time the fictitious reality slips is after Wanda has given an impromptu birth to her twins with the help of Geraldine. When Vision goes to bid farewell to Dr. Nielson, who was supposed to leave Westview for a vacation but was whisked away to help Wanda, the doctor claims that he will not be able to go on his trip as he doesn't think "we'll get away after all" as they are living in a small town which is "so hard to...escape." Ominous? We think so.
This interaction is happening while Wanda is inside with Geraldine and suddenly remembers her brother, Pietro while looking at her twins. The memory is so strong that when she talks, even her Sokovian accent is back. Again, whoever has tapped into her powers is not able to use them properly to control the residents of Westview. Hence the doctor is reminded that his car broke down because he planned to leave Westview, something which the creator of the construct won't allow.
At the same time, while Wanda is otherwise occupied, we see Agnes and Herb whispering about Wanda's sudden pregnancy and Geraldine's presence in the town. They even warn Vision about her, notifying him that Geraldine has no family, no husband, and more importantly, no home in Westview. She is just...there.
Inside, in the moment Wanda is singing to her children and thinking of her brother, is when Geraldine/Monica looks like she suddenly snapped out of a day-dream. She asks about Ultron killing her Pietro, which is indeed a stupid question but makes sense if Monica is just starting to get clear-headed.
Our theory for as to how Monica, who is obviously a S.W.O.R.D. agent sent in to rescue Wanda, became Geraldine is that the miniature red helicopter we saw in the second episode was actually a real one via which she entered Westview but the person controlling this phoney bubble made her crash. And as Wanda's powers have engulfed the entire town, Monica became a victim of it too, turning into one of the characters of a sitcom. She only managed to remember a part of why she came in before Wanda sent her crashing back to the real world.
But how could Wanda use her powers on Monica?
So far, we have only seen Wanda use her magic on two people- Vision and Monica Rambeau. While we have explained the former, the reason she could expel Monica is that as she didn't belong to this reality, she is fair game for Wanda. But others in the reality, except Vision, are being used as puppets by someone else and thus Wanda can't control them.
To sum it up, Wanda can control what Vision remembers because she created him through their shared connection via the Mind Stone. But she can't control the people of Westview because someone is using her powers to well, run the show. While people are somewhat aware of what is happening and do get some get moments of lucidity, this "someone' is constantly reprogramming people to ensure that no one makes Wanda remember her past and break out of this phoney dreamland. You can catch the latest episode of the series on the official Disney+ app.