This is how I made that connection.
We could all be wrong but it seems clear to me.
And they show like a fukking dome of red energy...lol
She is obviously overlaying her reality warping ability on a town and people that actually exist, consciously or unconsciously.
This show is def serving a lot of different purposes for the MCU. But one of the main ones stated by All Father Feige himself is really fleshing out the mechanics of how Wanda's powers work. If you're within her sphere of influence you're pretty much at her mercy.