I live in a raised hall floor flat and overlook the front garden of the house. The basement/garden flat use the garden and I can only think they became quite obsessed with hearing us moving around and, I think, whether or not we were watching them. I put some low furniture in front of the overlooking windows to remind us to stay back but I noticed they still visibly flinched when I opened and closed curtains or windows. They frequently said we walked across out floors and made the joists creak which drove them mad, but they didn't hear us talking or playing music etc. Nothing we could do helped, including loads of under and above floor sound insulation.... They sent us a horrible email when they moved out, telling us how we'd ruined their lives
We weren't curtain twitchers in the sense of deliberately watching these neighbours and, if anything, restricted our use of the windows overlooking their garden, so it was a bit difficult to know how to live in a way that didn't disturb them. In the end I felt that they spied on us due to their obsession with what we were doing. I've lived in a close community of small terraced houses in London where everyone was into neighbourhood watch and looking out for each other, gossiping, twitching the curtains, and it was lovely as there was a sense of real community.