These horrible floating eyes with extended tentacles, whilst simple, are some of the weirdest-looking creatures you'll encounter playing God of War. Written in the bestiary as being reminiscent of the 'Mare' in Old Norse folklore, the origin of the creature is of a malicious entity that sits on the chests of people as they sleep, inducing bad dreams and fitful rest in the process.
Since they can possess enemies around them and make them far stronger and more resilient to damage, that legend seems to have been distilled into a monster that makes the terrifying attacking hoards even harder to deal with, as if in a nightmare themselves. Floating dreamlike through the battlefield and pretty easy to take out, the Nightmare's fragility seems reminiscent of their power being rooted in manipulating the minds of others - as what's a nightmare in reality when you're not asleep?
Instead of squatting on a chest, these tentacled abominations wrap themselves around aggressive foes, taking the key idea of the Mare and spinning it into a supportive force for bad guys. The giant eye is also important - perhaps representative of being able to see into the minds of its enemies to become a personalised horror when attacking.
They're are also reminiscent of beholders from Dungeons & Dragons lore, a spell-casting, floating sphere defined by its one central eye. A nice little nod to the fantasy title that defined much of what we see in broader gaming now.