He doesn't have a daughter who is worshipped by a cult, he didn't kill his wife, he doesn't have a god-fetus growing inside of him. Henry Townshend is just a regular guy, a fly on the wall, watching this whole ordeal unravel in front of him --- this story of a murderer and his victims.

Near the end of the game, depending on what you do, Henry could become one himself.

None of the story relates to Henry directly. The closest tie he has is the fact that he lives in the apartment that just so happens to be an important place to the murderer, Walter Sullivan. His apartment is basically cursed.

You go throughout the game as Henry, witnessing and stumbling upon Sullivan's murders. And the ghosts you have to fight, stall and run away from are the ghosts of his victims. Sullivan needs 21 people to perform a ritual (which is a whole different story XD) --- and depending on how the game goes, and what ending your on the path towards, Eileen might be the 20th victim and you, Henry, could possibly the 21st, and last victim Walter needs.

Silent Hill 4 is not a story of Henry and his inner turmoils and troubles, it's of Walter and the room. Henry is just the 'camera' -- an innocent bystander players can't help but feel for.

He makes a comment in the game, about how he felt that the apartments/city and such were calling to him - like he felt that he was being called there to live. It's not a 'wrong place at the wrong time' situation. Technically, you could say he is part of this whole ordeal because he is one of the 21 chosen sacraments. But he's still innocent and unrelated to the main villainy in this story.