The disease the children have is an actual disease known as Xeroderma Pigmentosum which is basically an extreme sensitivity to sunlight. It is very rare with roughly a thousand people in the world that have it.
Nicole Kidman originally tried to persuade Alejandro Amenábar and the Weinstein brothers to find another actress for the part. Coming off the bright and exuberant Moulin Rouge! (2001), the actress was initially reluctant to do a film that explored such dark places.
In a pivotal scene, Grace finds a photograph album containing pictures of people she believed to be sleeping. Mrs. Mills informs her they're all deceased, and that people photographed the deceased in the previous (19th) century. In reality, people did photograph their deceased loved ones during the late 19th century. Most were photographed lying down, as if in a deep sleep; others would be propped up in chairs, posed with favorite objects such as children with favorite playthings; adults with books or newspapers. The reason many families did so was because that would be the only photograph they would have of the family member(s) if they didn't, as photography was a rarity in the 19th Century.
The movie opens with Nicole Kidman, in voiceover, reading a story. She begins with the words, "Now children, are you sitting comfortably? Then I'll begin." The BBC radio programme "Listen With Mother", broadcast in the UK between 1950 and 1982, always began, "Are you sitting comfortably? Then I'll begin."
The basis for this movie is an episode of the British series 'Armchair Theatre' called 'The Others' made in 1970 and remade as a movie called 'Voices' in 1972. This version is more elaborate but the story is the same.
Nicole Kidman pressed for the hiring of Eric Sykes as Edmund Tuttle as she and her then-husband Tom Cruise had twice been hugely impressed by his theatre work (in "School for Wives" and "Kafka's Dick"). Sykes was equally fulsome in his appreciation of Kidman and her work.
The ghostly image appearing over Grace's shoulder resolves itself into a somber face in a painting on the wall. This image is actually a detail (specifically, a close-up of the Puritan man's face) of the 1855 Pre-Raphaelite painting "The Wounded Cavalier" by William Shakespeare Burton. The face of the painting is that of Eduardo Noriega.
The Others (2001) comes from a peculiar cross-section of production cultures. It stars an Australian woman playing an Englishwoman. It was written and directed by a Spaniard, backed by Americans, set in Jersey but filmed in Spain.
Although the main characters are shown sitting at a table with food and drink, only one of them is seen putting food or drink into her mouth in a single shot. This would be Anne, who sips from her bowl at the end of the breakfast table scene (in the home release version only).
Being a Spanish co-production, this film went on after its release on September 7, 2001, to become Spain's biggest grossing domestic film of all time after less than two months of release. However, in 2014, the box office record was broke by Ocho apellidos vascos (2014).
Anne's description of what ghosts look like, i.e. people under white sheets with chains, might be a reference to Charles Dickens' novella A Christmas Carol, wherein Scrooge is haunted by his dead partner who is cursed to wander the world while dragging chains. This could also be reinforced by the fact that Anne said she read the description in a book.