What does "Each night increases the danger" mean?

Solution 1:

The longer you camp in a single place the higher the chance of an encounter. The specific encounters do not get more difficult, they depend on the same enemies list for whatever area.

Solution 2:

From what i can tell it either doesn't mean much about the actual night time. Most people find that the monsters (individually) don't get much harder at night.

Maybe it is just saying that as you progress through the game, there will be more powerful monsters that you have to verse? Or maybe it is just talking about the difficulty of the game in general.