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Found this one in the progress of writing the question, but didn't want to waste my efforts, so posting with a self-answer.

It was a film that my wife and I watched on DVD about 5-10 years ago featuring a young girl who is sent to a remote boarding school set by some woods. Upon arrival to the school, she takes a placement test, which she is told she got high marks upon. I seem to remember there being something hinky about the test, with the questions not making sense and her marking it more or less randomly, with some speculation in-universe that the test is a sham, a way for the teachers to pick their students while claiming a lack of bias. There is a legend about witches in the school's history, tied to the disappearance of students, and I believe the climax involved the girl finding out that the teachers are, or believe themselves to be, witches, and that the test was actually a test of their "potential", although I don't recall if it was supposed to indicate potential to learn magic, that they were reincarnations of the legendary witches, or something else.

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This is the 2006 film, The Woods

In 1965, after burning down a tree in her yard, rebel teenager Heather Fasulo is sent to the boarding school Falburn Academy in the middle of the woods by her estranged mother Alice Fasulo and negligent father Joe Fasulo. The headmistress, Ms. Traverse, accepts Heather in spite of her father's bad financial condition.

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With the help of Marcy, Heather eventually learns to adjust to her new school, even having fun at times and making more friends. Ms. Traverse subjects Heather to special tests to see if she is "gifted", telling her that it is all part of her scholarship to the academy. The girls tell Heather a spooky story about the history of Falburn, which includes three young redheaded sisters who arrived at the school and turned out to be witches, killing the headmistress before leaving to the woods.

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When she awakens, she is wrapped in vines in a large foggy room, next to Ann and Marcy, who are also held captive. All of the teachers appear and reveal themselves to be witches. Ms. Traverse is their leader, and she explains that their spirits have been trapped in the woods all these years, and they need to inhabit the bodies of young women to escape their imprisonment. Heather appears to be the centerpiece of her plan because she has the strongest powers among the gifted students.

Trailer

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