Did witchcraft cause the community of Salem to unravel?

Initially, not a great deal happened in the aftermath of the Salem witch trials—certainly nothing that changed the whole complexion of the town or the nature of its inhabitants. However, three years after the trials concluded, demands for justice for those wrongly convicted became increasingly loud and insistent. The Quakers in particular were at the forefront of a growing campaign to right the wrongs of this monumental injustice.
Though just about everyone in Salem still believed in the existence of witches, a general consensus emerged that those arraigned and condemned to die as witches had not received the justice to which they were entitled. Jurors from the original trials came forward and publicly sought forgiveness for their part in what was becoming acknowledged as a terrible tragedy.
Over the course of the next quarter century, a number of bills were passed by the state legislature reversing the original court's decision against most of those whose names had appeared on petitions for justice. The Governor of Massachusetts also authorized financial compensation to the petitioners, a recognition that they'd been falsely accused.
Salem went into relative decline for the next century or so, becoming a culturally isolated backwater where nothing much ever happened. One only has to read the introduction to The Scarlet Letter, with its unforgettable descriptions of the rotting wharf, home to the Customs House, to see just how much long-term damage the witch trials did to the town's reputation and prosperity.