Answer: Chemical pollution caused unusual growth.
In the opening sequence to "Eight Legged Freaks", we see a distracted truck driver evading a rabbit and losing, in doing so, one of the barrels with toxic waste his truck carries. The barrel falls into a drainage ditch, and we can see a warning sign on the barrel. The contents spread out through the ditch. The next scene shows us an amateur entomologist catching an enlarged butterfly and pondering on what might have got into the water.
The stars in "Eight Legged Freaks", other than the spiders, are David Arquette (who plays a mining engineer) and Kari Wuhrer (as the female sheriff). They take up the task of protecting the villagers against those huge spiders. Scarlett Johansson has a role as the sheriff's daughter.
Ellory Elkayem, the director, also was responsible for writing the story and the screenplay - together with Randy Kornfield (story only) and Jesse Alexander (screenplay only).
The red herrings refer to other movies. The muggles are non-wizards in the "Harry Potter" franchise. The radiation incident refers to "The Fantastic Four". Wayne Szalinski is the inventor in the movies "Honey, I Shrunk the Kids" (1989) and three sequels.