While George Lucas kept things open-ended in the Vanity Fair interview, it makes the most sense for Palpatine to be the phantom menace. After all, “Episode I” introduces a world where the Jedi believe the Sith to be extinct. This makes Darth Maul’s emergence quite concerning. Even though he’s defeated, it’s not the end of the threat. In the conclusion, Yoda (Frank Oz) mentions that there must always be two Sith — an apprentice and a master. The Jedi don’t know which one Darth Maul was, but the other must surely be out there.
And the movie doesn’t try to hide who the real villain is. After Yoda’s comments, the camera pans over to Palpatine. It’s a case of dramatic irony where the audience is meant to know who the overarching antagonist is while the characters remain unaware. Even though the Emperor went unnamed in the original trilogy films, he was referred to as Palpatine in novelizations for the original “Star Wars” and “Return of the Jedi.” That means it isn’t a secret to hardcore Star Wars fans that Palpatine is hiding a dark secret.
Perhaps it would’ve been best if the movie was called “The Phantom’s Menace” to refer to Palpatine and Darth Maul. The former is the “Phantom” who oversees the machinations of the primary “Menace” in the film. Considering how it’s still inspiring debate to this day, “The Phantom Menace” is a great title in that it’s open to interpretation and could have multiple meanings.