The characters and the conflict are first defined in the story's three opening letters. Furthermore, the psychological conflict of the protagonist, Nathanael, is represented, who is torn between hallucinations and reality. Nathanael struggles his whole life against posttraumatic stress which comes from a traumatic episode with the sandman in his childhood experience. Until the end of the book it remains open whether this experience was real, or just a dream of the young Nathanael. The text clearly leaves the decision open in as much as it offers two understandings: that of Nathanael's belief that there is a dark power controlling him, and Klara's postulation (together with Lothar) against this that this is only a psychological element.
The story is partly a subjective description of the proceedings from Nathanael's viewpoint which, due to enormous psychological problems, is not likely objective – or possibly objectively portrayed. Hoffman consciously leaves the reader unsure. In this, the interpretation from an Enlightenment perspective makes sense against the Romantic view, whereby Klara represents the enlightenment and Nathanael the Romantics.
Of central importance is the "eyes" theme (interpreted by Freud in his 1919 essay, The Uncanny, as fear of castration), the "steps", the robot, and laughing. Hoffman, well known for not conforming to society, manages to give a satirical critique of society here, which offers a lesson to both Enlightened scientists and Romantic "hoverers and floaters".
The Coppelius/Coppola character can be considered not as a real physical character, but as a metaphor, like Nathanael does when he returns home. He represents the dark side within Nathanael. Note that the fight between Spallanzani and one or both of them for the "wooden doll" where we hear Coppelius's voice but see Coppola. There is also the motif of fists, where Coppelius is always described as having fists, but never hands.