I've seen a lot of people still talk about this theory saying they aren't convinced or that it's bullshit. Here's the relevant part of the interview:

You mentioned aliens and I wondered if we could talk about your film Signs. What prompted you to take a stab at science fiction? I stand by my previous answer, but I will tell you that I had a lot of pressure at the time to try science fiction. I'm not the sort of guy to do the next Star Wars or the next Aliens. Those are perfectly good movies, but I wanted to attempt something deeper and more universal. You know what I said about giving a Dracula movie a deceptive title? That's what I did with Signs. That was a story about a war between Heaven and Hell. The aliens were demons and the people's dead loved ones were angels. That was why I had them pray several times in the movie. It was about faith. So the water that killed the aliens was holy water? (He laughs). Most critics just didn't get that. My publicist tells me that you wrote a very negative review based on the water concept yourself. You guys just didn't use your heads. Water is holy in general. Many cultures revere it. Baptisms, holy water at a church, some pagan groups worship the sea or rivers. It's not a difficult concept, but some people just can't wrap their small minds around that. I think it was the idea that aliens would invade the earth, a planet that's like 75% water, has water that falls from the sky and- No. Bullshit. You're still being small-minded. The characters in that movie called them aliens, but it was never explicitly demonstrated what they were or why they were on earth. People are much more accepting of aliens these days, and the idea was that if demons appeared among us, they would be perceived as aliens.

With zero prompting from the interviewer, M. Night straight up says that they are demons that are being perceived as aliens because modern people would never believe that they were demons.