Briefly Googling, I can find no English-language discussion that properly explains this superb, but extremely confusing movie.
It could be that this is one of those movies that are open to many interpretations/explanations, but I get the sense from all the various flashes throughout the movie that there is meant to be some single coherent explanation.
There is, moreover, a Hollywood remake (which I haven't watched), so perhaps that furnishes more clues.
Moreover, as stated on Wikipedia, the movie is inspired by a Korean folktale. But to read that folktale, it would seem that the movie was scarcely meant to be a faithful reproduction of that folktale. For example, it is not even clear which sister in the movie corresponds to which in the folktale. In the movie, it seems that the younger sister Su-yeon dies before the elder sister Su-mi. (I don't know if the latter ever dies.) In the folktale, the older sister dies first, then the younger.
I imagine there are Korean language forums that explain the movie more fully but unfortunately I do not know Korean. I hope someone here with more intimate knowledge of Korean culture/history/folklore/cinema can explain the movie here.
In particular, some burning questions I have are:
- Was there actually anything supernatural throughout the movie? Or was it all purely Su-mi's imagination?
- What exactly was the correct chronology of the family history? Why were there pictures of the mother and the stepmother together? Near the end, the mother and stepmother seem to be depicted as being together in the same house. How does all that make sense?
- Was the stepmother really ever a bad person? Or was it all Su-mi's imagination?
- How did Su-yeon actually die? Did Su-mi or someone else kill her?
- How did their mother actually die? Was it some terminal illness?