Taking the plot device entirely literally misses the point of the book somewhat; it's so highly metaphorical and so much of it is told through the "VR" dream sequence exposition.
It's really a book about the question: how do we know what we know? Specifically, how do we find truth when powerful forces have devoted themselves to obfuscating it for us? In other words, the "cultural revolution" in China. And by extension, the present day wǔmáo dǎng era.
I haven't read the sequels, but the Sophon bit seemed pretty explicitly literal. How can I not read that part literally? Either the Sophons have the power ascribed, or the plot is nonsense.
Obviously it is literal, it has to be - it's relevant to the object-level plot both in the first book and in the latter two. Whether or not it has layers of additional "meta" meaning associated with it, that's another topic.
Though I'm not sure about the indirect references to various political events that people seek in the story - the author himself wrote explicitly in the afterword for American readers that he is not writing sci-fi to explore contemporary issues in different settings.
It's really a book about the question: how do we know what we know? Specifically, how do we find truth when powerful forces have devoted themselves to obfuscating it for us? In other words, the "cultural revolution" in China. And by extension, the present day wǔmáo dǎng era.