I think it's all but confirmed that Wanda's doing this to herself. She's exhibited too much control over things for it to be otherwise. She rewound things last episode, Vision glitched when he was talking to her, and she's presumably the one who booted Geraldine out.
She's trapped a town (maybe even just a neighborhood) in with her. I was previously under the impression that they were all suffering from the same delusion, but Herb and Agatha seem to have some awareness of what's happening. Maybe they (and maybe others) figured out what was happening and started to fake it, allowing them to dodge Wanda's powers. I suppose they could all be faking it, but things like the dinner in the first episode make me doubt it.
I was never really sold on the Agatha=Agnes idea and this episode just makes me doubt it further. Agnes seemed to be fearful of the situation. What little I know of Agnes makes me think she'd have enough control that she wouldn't be scared. She could be faking it, I guess, but I don't see why she'd do that.
I don't think Geraldine being in 70s gear is a worry because I don't think Wanda/the simulation did it. I think she's been entering and exiting Westview. SWORD saw that the simulation had shifted to a Brady Bunch theme, so she dressed accordingly.