Brocken Spectre, courtesy of yourweather.co.uk
The Dark Watchers fall into the category of "every site repeated the same unsubstantiated story," which makes it a bit difficult to research and, honestly, boring to read after a point.
According to the stories, since historic times, those who lived around the Santa Lucia Mountains would see tall, imposing, shapeless figures in the mountains. They never did anything but watch silently. Some would mimic your movements, as if trying to obtain a level of humanity. The Chumash people spoke of them, as did the Spanish settlers, the latter giving these silent watchers the name "los Vigilantes Oscuros." And so they continue to haunt the mountains today, quietly observing those who wander through the hiking trails. Sometimes they wear capes, others hats, and so on.
It's a fun story, but largely unverified. For one, there are no stories that rememble these mountain apparitions in Chumash lore. For another, I've yet to find any source for Spanish settlers discovering these spirits in the 1700s and naming them "los Vigilantes Oscuros." In fact, one of the first verified appearances of these creatures mentioned in print was in John Steinbeck short story Flight (1938):
Pepé looked suspiciously back every minute or so, and his eyes sought the tops of the ridges ahead. Once, on a white barren spur, he saw a black figure for a moment; but he looked quickly away, for it was one of the dark watchers. No one knew who the watchers were, nor where they lived, but it was better to ignore them and never to show interest in them. They did not bother one who stayed on the trail and minded his own business.
Of course, this isn't to say that the Dark Watchers aren't real, in their own sense. In fact, their realness and cause are outright stated in their first known print appearance, in Robinson Jeffers' 1937 book of poetry Such Counsels You Gave to Me & Other Poems:
A young man carrying a battered straw suit-case
Climbed slowly the wavering cattle-track from an off-set
Gorge of Mal Paso Canyon, and across the hill
Torward Howren's pace. He staggered from time to time
With illness or extreme fatigue. Behind him in the magnificent after-glow of a November sundown
The two brightest of planets hung close together, like brillian condensation of the amber light
Above the crimson; the sky overhead was still blue and pale. The young man was perfectly alone
On the white-grassed hills under the sky, he was like a hardly noticed thought of unhappiness passing
Through a great serene mind. But when he aproached
The fall of the hill toward Howren's he saw apparently
A person on the verge, outlined against the darkening
Commissure of the farther hills, intently gazine
Into the valley. The young man's tired and dulled mind,
Bred in these hills, taught in the city, reverted easily
Towards his dead childhood; he thought it might be one of the watchers,
Who are often seen in this length of the coast-range, forms that look human
To human eyes, but certainly are not human.
They come fomr behind ridges and watch. But when he approached it
He recognized the shabby clothes and pale hair
And even the averted forehead and concave line
From the eye to the jaw, so that he was not surprised
When the figure turning toward him in the quiet twilight
Showed his own face. Then it melted and merged
Into the shadows beyond it; the young man thought heavily
That in his state of mind and body hallucination
Was not surprising. He went and stood for a time
Just where the figure stood, in the same attitude,
Staring down at the farmhouse roof. [...]
The Dark Watchers are Brocken Spectres. Their name derives from the 'Brocken' peak in the Harz Mountains in Germany, on which they were first described in 1780 by Johann Silberschlag. It's an optical illusion not uncommon on misty or foggy hills and mountains; a person stands with the sun behind their back, which causes their shadow to be projected on the water droplets of the fog/mist. Depth perception is difficult and can make these projections appear large and far away. Sundown or sunrise offers the best angle for this optical illusion.
It can also be artificially-caused, such as in the image below, with fog and car headlights.
courtesy of wikipedia