Lyric discussion by EOnegin 

I think Donovan is looking at himself from the outside and trying to figure out how he and his world are evolving, maybe from something purely idealistic to something else. This could be a realization that the 'peace & love Eden dream' of the late sixties was changing into something else, perhaps more commercial, and possibly bewitched.

When he looks 'in' his window, and when he looks at himself over his shoulder in the mirror, he sees himself from a different perspective, but isn't sure who he sees...and doesn't know where he and humanity are going from there...maybe...

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