Alternative Character Interpretation: Originally, the stranger was the marshal's brother and may still be, the script was changed to leave it up to the viewers. The most common are the ghost of the Marshal, Death or even Satan himself.
Acceptable Targets: The cowardly of course. The townsfolk are repeatedly shown to be either unwillingly to confront or even care about the evils within their own town.
Dead All Along: A popular interpretation is that the Stranger is the ghost of the dead marshal, given that he relives the marshal's death, which he wasn't there for otherwise. There's also, of course, the last line of dialogue in the movie. "I never did know your name" "Yes you do", as the camera pans to show the previous marshal's gravestone and name. He could also be some sort of avenging spirit as well. The original script identified him as the marshal's brother.
What an Idiot: The townspeople have their ambush set up and ready, the gunmen ride into town, and what do they do? Cower down and refuse to shoot.