So far a some of the people agreed with this, and I'm displaying it for others to see as well.
Malawrath: Ancient, powerful spirit. Has been around for god knows long. It keeps its power contained but always charged with blood and bones. It casts its influence amongst the humans in town if it needs more fuel.
Misery Falls: Was originally just miles of woodland. Anyone who ventured there would first notice it was dead silent. No wildlife was around, not even bugs. The only sound they could hear if they got close enough was the distance rush of water from the waterfall, and underneath, almost-silent the whirr of a portal that lay in an underground cave. The land was feared; the animals abandoned their homes and the Native Americans avoided it, that is, until some settlers arrived. The Natives warned them of the dangers of the land, but the settlers blew it off and began to build a town, and named it Forest Falls. However, within a month of settling, some people began to go crazy. Driven mad for unknown causes, killing off others and jumping off the waterfall for no good reason.
Lady Misery: Originally named Lady Miser, was a young woman, and the daughter of a rich man. Over time, she too began to go a bit crazy, from Malawrath's influence. However, she kept it contained. She had the strangest urge to start a school, and did so. It was called "Forest Falls Boarding School" and it only taught girls. The school was going great. However, Lady Miser, for one night a month, would silently kill some of the girls. One or two at most, to not raise suspicion. However, the town began to notice the disappearances and linked the girls' deaths with Lady Miser. They discovered some fresh bodies in an underground cave and accused the Headmistress of Witchcraft, and beheaded her soon after. Over time, her name changed to Lady Misery because she was associated with Misery. The town also renamed itself to "Misery Falls".
The School itself: It started as a small all girls' boarding school. But after Lady Misery's beheading, no one wanted to take over the school in belief that it was cursed, so it stood empty, from 1790 until 1865, when the Civil War ended. Soldiers who returned home shortly began to go "crazy" from haunting memories of the bloodstained battlefields. The town decided to turn the old school into an institution, since it was the biggest building they had. Along with the soldiers, other mentally and physically ill patients arrived, and more had to be built to have enough room. The ground underneath was hallowed out to make way for morgues, crematoriums, and autopsy stations. Some of the staff members under Malawrath's influence would subtly kill some of the weakest patients to keep the ancient spirit satisfied. Those who died on their own also kept it satisfied. This continued until 1915, when the asylum finally went out of bsiness, and the building was once again empty. 5 years later, it was reopened as the boarding school we know today. However, there is still a lot left over from the asylum. Old surgical rooms were boarded up or renovated for classrooms. Some classrooms still have the original equipment on display, yet the teachers lie and say they were donated. The nurse's office still contains shelves where they placed bodies. The basement itself is sealed from all students, their entryways hidden because everything left over is still down there. Gurneys for wheeling dead patients, crematoriums still had ash in the ovens. Chemicals and tools used for autopsies never touched. Why didn't anyone remove them? Because it was too creepy. Workers kept getting bad vibes and decided it was best to leave it be.
Wall Ghoul: Originally was a patient when the school served as an asylum. He was a Union soldier, glad to be home from battle. Yet he began to gain the symptoms of Schizophrenia, which, at the time, no one knew what it was. His family put him in the asylum, and was known to be one of the most insane patients. Other patients, who were the more dangerous ones, had enough of him and snuck up on him and whacked him in the head with a stolen surgical tool. He was knocked out cold and thought to be dead. The other patients dragged him to a part of the building that was under construction, and tossed him in a wall before returning back to their rooms. The workers the next day never saw him, and he woke up sometime later enclosed in the wall. He died of suffocation.
Ghosts that died on school grounds: Because they died closest to Malawrath's portal, they have a sort of bond with it. This causes them to remain in Misery High forever. Malawrath's influence also causes some of them to have violent tendencies (aka why Mary-Anne kills anyone who loses to her in a poker game).