Board Thread:Show-Related Questions and Answers/@comment-82.234.145.137-20130214183247/@comment-1705898-20130327092943

the last episode provides the answer. They repeat their actions over and over, being reset when they wake up next day. The only way for things to not happen that way is if some one who the curse didn't affect (in this case, Regina) would make some changes. Even that is kinda of dubious because Regina was seen walking down the same street over and over.

actually this kinda of explains why Henry was so determinate in believing that fairy tales exist (beyond the fact he's a kid and actually believes magic, fairies and all that exist). When everyone he knows, except his mother, do and say the same thing over and over non-stop you get suspicious. I think when Henry developed self-awareness he noticed how everyone seemed to be trapped in time. So when he got his hands on the fairytale book and saw that the characters were the people he knew and that they were cursed, he believed it - he's a kid after all.