So what do you think is happening in Strangerville?

I think the infection is in the water and alien fruit. Maybe the water supply was contaminated by the flora. All planned and controlled by Bella, who we discover cackling inside the secret lab, plotting world domination.

In other words, I don't know.

By the way, there were two Bella Goths in the Sims 2. It's quite possible that there will be a second Bella in the new town.

I think it's alien plant species that release spores and Sims get infected by the air if too close to those alien pod plants and create pod people/Sims. I also agree the plants could taint water with infection too or just attack people. I think the SIM government knew about this plant life, tried to use them for their own gain. I believe this led the plants to strike back. Now SIM government wants to try to cover up, lol.

Yeah, it's the classic "military finds something with potential but also highly dangerous, experiments on it, eventually it goes awry and the local populace of a small town nearby pays the price amidst strange and stranger happenings, it's up to a gang of misfits to solve and save the world from the supposedly evil alien plant of doom".

I'm guessing in the end they will also go the route of the plant leader being but a misunderstood alien who just wants to get out of Earth/go back to its home planet/live in peace with humans but is trapped by the military and has thus started fighting back for its your survival and freedom, thus the brainwashed sims.