Grace is in fact the daughter of the gangster who was searching for her. After a conversation with him she decides to kill all the towns people and burn down Dogville. She realizes that Dogville took advantage of her fraility and kindness and does not want anyone to stumble upon the town and go through what she had to. She feels the world would be a better place if Dogville was destroyed.
Narrator: It was as if the light, previously so merciful and faint, finally refused to cover up for the town any longer. Suddenly you could no longer imagine a berry that would appear one day on a gooseberry bush, but only see the thorn that was there right now. The light now penetrated every unevenness and floor in the buildings and... in the people.
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