Darker and more disturbing than I remembered it even
I like many others saw this film as a child; rented it from the video store in the mid-'90s, and was terrified and simultaneously fascinated by it.
I re-watched the film for the first time in quite awhile a couple of weeks ago, and I forgot how thematically dark and at times quite frankly disturbing this film is. The images of Karen are still chilling to me as an adult, and the entire atmosphere the movie contains is downright scary. Things get even more twisted when Ellie gets possessed by the watcher at the end and is speaking in a down-pitched voice, writing backwards on mirrors and windows, walking through the woods glassy-eyed; even the ceremony itself—the "game" the kids were playing—seems totally Satanic to me.
The film is obviously not as effective for me as an adult, but it's still very well-crafted and a lot more macabre than I expected to think after seeing it again for the first time in awhile. It's very surprising to me that Disney backed this. Some have said that "Something Wicked This Way Comes" is their darkest film, but I think "Watcher in the Woods" is far darker.