Can someone explain the history of the Sandman?

I just read the story translated in English. I'm confused by the ending.

'Look there at that curious little grey bush,' said Clara. 'It actually looks as if it were striding towards us.'

Nathaniel mechanically put his hand into his breast pocket - he found Coppola's telescope, and pointed it to one side. Clara was in the way of the glass. His pulse and veins leapt convulsively. Pale as death, he stared at Clara, soon streams of fire flashed and glared from his rolling eyes, he roared frightfully, like a hunted beast.Then he sprang high into the air and. punctuating his words with horrible laughter, he shrieked out in a piercing tone, 'Spin round, wooden doll! - spin round!' Then seizing Clara with immense force, he tried to hurl her down, but with the desperate strength of one battling against death she clutched the railings.

Why did Nathaniel turn on Clara so suddenly? What was the curious little gray bush coming towards them? Was it a metaphor for the darkness that is about to consume Nathaniel?

Am I supposed to believe that after looking at Clara up close through the looking glass, Nathaniel discovered her to be a lifeless doll invented by Coppelius? Or am I supposed to believe that Nathaniel's attempt to kill Clara was induced by his mental illness and paranoia? Is that the point of the story, to leave me wondering whose reality is correct?

/r/AskLiteraryStudies Thread Parent