Of course you saw the Hag earlier when you went to steal her diary. After a short conversation with you, she will curse you and teleport you to a place on the road not far from Tearfall Run. From this point you are under The Hag's Curse and you cannot go into Gloamwood Pines or they will kill you on sight. You are also under a transmogrify into Werewolf form but it wears off in 5 minutes or so. Until it does the NPCs at Tearfall Ruin are unavailable to you but you are not KOS.
The Hag's Curse cannot be removed by cleansing. It can be removed by Gwyddon Duskenleaf in Gloamwood Pines if you can get to him without getting killed.