I know that the Nightmares the Magical Girls fight as a substitute for the Wraiths and/or Witches are born from people's nightmares (as shown when Hitomi returns to normal but is asleep and she was about to go to bed when the her Nightmare first appeared).
However, given the world in which they appear in is a fake one inside Homura's Soul Gem. I am wondering who came up with the idea of fighting Nightmares (Homura or the Incubators) and why a new kind of enemy rather than the Wraiths? (in order to keep the illusion of reality)