This trope is what dropped Troll 2 in my opinion from being the epitome of So Bad, It's Good to merely an excellent example. Originally, it seemed the goblins were all destroyed and their appearance at the end was a totally nonsensical Plot Hole. Comedy! That is, until I realised that a Chekhov's Gun set up earlier in the film was that the family was making a home-exchange with some people who later turned out to be goblins. Suddenly, the ending made sense and lost its comedy value (although this was muddied by limited costumes, and the fact that the home exchange family briefly reappeared in a later scene due to them having "car trouble"). —Schrodingers Duck
On the other hand, it doesn't explain why those goblins weren't killed along with the rest of them, or why their magic still works. - Man Without A Body
Furthermore, the goblins in question never actually left Nilbog - "We had car trouble" —Gribbles
Nah, they weren't the family that left. He was clearly just having another nightmare like the one he had in the beginning.
So am I correct in believing Grandpa Seth made a deal with the devil to get his powers and return to earth in order to save his family? In one scene what appears to be the goblin ringleader in human disguise tells the grandpa to "go back to your kingdom of shadows" which prompts Joshua to ask "are you really in hell grandpa?". It took me awhile to make the connection but it's the only logical reason for why he is alive, has powers, and apparently has a time limit on earth. I guess when the contract was up he was sent back to hell (why he is in hell is anyone's guess, I guess that's what happens when you make a deal with the devil).
After Joshua asks the question, though, Seth says "No," though. He could be lying.
I want to think he was lying to protect Joshua from things he should not know and was doing it in a way where Joshua can still trust him and follow his advice. But of course it doesn't make any sense considering how many shady things Grandpa Seth is pulling Joshua into, turning his family against him and using him as a puppet for many terribly thought out and sometimes even dangerous plans. It's established that Grandpa Seth didn't need to talk to Joshua specifically and he could have communicated directly to the mother and father in the bathroom mirror of their house (assuming he knows the building layout) or right in person. But despite this I think it's the only explanation that makes any sense for his powers.