Prophecies are obscure and often contridictory... !

I'm no soothsayer but as I interpret it, Manfred ruled Otranto and used the castle as his own like a tenant.
(Richardo made the deal with St. Nicholas to build a church and 2 covents to atone for poisoning Alfonso and to keep Otranto.- not realizing St. Nicholas intended his descendent to retire to this convent- as events came to pass.)

The castle, the seat of real power remained with 'the real owner'.
This may explain the title of the book 'The Castle of Otranto'.

I maybe wrong but I think the focus of the propecy is the Castle.

Crucial incidents as Manfred's design to mix his own blood with Alfonso, and return of Alfonso's direct heir spark off a grand finale of the collapse of castle walls when the giant busted out, ascent of Alfonso and those revelations.