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In the 2014 Australian horror movie, the Babadook, the eponymous monster is implied to grow stronger as the victim denies it.

Towards the end, Amelia acknowledges the monster which makes him weak, or does it?

The monster is shown to assume the shape of Amelia's dead husband at one point, and it is presumably the same shape he's in at the end (locked in the basement). Amelia is also bringing him earthworms to feed on. Also, Sam is shown to perform some truly advanced magic tricks way beyond the skill set of a kid his age.

All this makes me believe that there's something more to it than simply denying/ acknowledging the monster. How can he shapeshift? At the end, is he still possessing Amelia/Sam? What exactly is the range of the Babadook's powers?

EDIT: I went through this question, which has one metaphorical and one non-canonical answer. None of which explains the Babadook's powers.

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    Yeah, I'm with Andrew on this one. It's not exactly a creature feature but rather a big honking metaphor. – Walt Apr 13 '15 at 7:54
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To understand Babadook's powers/abilities, one must know, first of all, what exactly is the Babadook? Is it an evil spirit, a mythological monster, an actual creature or just a symbol?

Babadook is the impersonation of Grief & Problems.

The wikipedia entry itself answers a lot of questions

Writing for the Daily Beast, Tim Teeman contends that grief is the "real monster" in The Babadook, and that the film is "about the aftermath of death; how its remnants destroy long after the dead body has been buried or burned". Teeman writes that he was "gripped" by the "metaphorical imperative" of Kent's film, with the Babadook monster representing "the shape of grief: all-enveloping, shape-shifting, black".

Amelia is a single mother grieving over her husband's death and finding it very difficult to cope with the responsibilities of parenting.

The director Jeniffer Kent has stated that

she sought to tell a story about facing up to the darkness with ourselves, the "fear of going mad" and an exploration of parenting from a "real perspective". In regard to parenting, Kent further explained in October 2014: "Now, I’m not saying we all want to go and kill our kids, but a lot of women struggle. And it is a very taboo subject, to say that motherhood is anything but a perfect experience for women.

With this background, let's go back to your original question: What are the powers of the Babadook? This question can be rephrased as What are the negative-effects of not being able to cope up with your grief and your problems?

Babadook can do what grief and problems can do to someone, someone who is not coping well. And this very thing is very subjective and varies from person to person, situation to situation.

And how is the monster defeated? By acknowledging it. Acknowledging one's problems and standing up to them. I think at the end, Amelia acknowledges and accepts the fact the her husband has indeed gone forever and she must overcome the hardships of being a single mother. This eventually weakens the monster within her and she feels empowered again.

From the same source:

Teeman states that the film's ending "underscored the thrum of grief and loss at the movie’s heart", and concludes that it informs the audience that grief has its place and the best that humans can do is "marshal it"

As for Sam's magic tricks, I see it this way: What happens to kids who have troubled parents at home? They are troubled themselves, not able to do good themselves. And what happens when their parents become strong? They too become strong and able to unleash their unlimited potential. Hence the great magic tricks.

  • +1, Thanks for the exhaustive answer. I'm well-aware of the metaphorical way many critics have interpreted the movie. I'm not against it. But I'm trying to find logic in the canonical story itself. Since a scene clearly shows the babadook entering Amelie's mouth, it's safe to interpret that the creature exists within the movie, metaphors aside. If so, what can it do to the victims? – Tushar Raj Apr 13 '15 at 10:28
  • @Tushar Well, turn them mad, take them over and control them, I guess. – Napoleon Wilson Apr 13 '15 at 16:40
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The word Babadook is a anagram of "a bad book". In the book was a passage about seeing what the babadook really was underneath would scare you to death. The book was her suppressed feelings toward her son and the death of her husband.

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