One flew over the cuckoos nest
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I think that simply calling Ratched a villain is too simple. Although she is an antagonist on the surface, she represents a greater sense of repression. She is, in many ways, a metaphor for all forms of repression, particularly sexual repression. She seems to be ashamed of her own sexuality, consistently buttoned up in her white nurse's outfit, but she cannot hide her large breasts, her one incongruous physical trait. As a metaphor, then, it is only appropriate that her final comeuppance involves McMurphy (symbolizing freedom) tearing open her uniform and unleashing her breasts and body. As punishment, Ratched has McMurphy lobotomized. In that battle, authoritarianism, repression, and conservative sexuality win, but readers are led to fight against what Ratched represents.
In many cases, we cannot call a character a villain unless the characted has some sort of developing character portrait. In one sense, Nurse Ratched is simply a static character who stays the same throughout the novel. She lets her personality control each situation because she has decided that her authoritarian, masculine personality will be always in place. However, she is a somewhat round character in that she does act like a villain in each situation; her intention is to always be in charge and to do what it takes to put her thumb on the men. She is a villain in the sense that she does not want the men to be happy.