Grace collaborated with the occupying Germans
In one scene, Grace admonishes her children when, after reading aloud a story about Christian martyrs, they tell her that they thought it was dumb for the children in the story to openly admit to the Roman officials that they were Christians when it resulted in their execution and that they would have denied Christ if they were in the same position. Later, after Grace's husband tells her he's leaving again, she refers to the fact that the Channel Islands surrendered to the Nazis. Taken together and added with the fact there were people in occupied countries during WWII who denied their former allegiances in the face of their Nazi conquerors, this suggests Grace in some way collaborated with the Nazis when they occupied the island. As a result, she became such a pariah to the other islanders that they all avoided her. (Granted, Grace did say the Germans never set foot in the house but that doesn't mean she didn't say or do something that would've indicated she didn't object to their occupation. If that was the case, the Nazis would've had no real reason to set foot in there.) Soon, the guilt and the isolation—compounded with the children's condition, her husband's absence, and the constant gloominess of the house—were too much for her to bear.- Also, the mention by Grace of "children's limbo" (i.e., a place where children who deny Christ in order to save themselves go when they die) corresponds with the house itself being "limbo"—Grace was there because she went against her beliefs in a misguided attempt to protect herself and her children (who she later ended up murdering).
