The Princess and the Goblin
(Everyman’s Children’s Classics, 1993) 
Our oldest children are now 4 and 7, and for some time I’ve been looking for a way to transition our bedtime reading from picture books to novels. With The Princess and the Goblin I think we might have finally managed it. The kids loved it.
The story is about a princess who lives in a mountainside castle, where the local peasantry are miners, digging tunnels deep into the mountain. Yet there is more activity under the hill than you might expect: long ago a group of disaffected subjects retreated under the mountain, and have nursed a hatred for the royal family for many generations. These goblins — for so they have become, hidden away from the sun and the fresh breezes — are also miners, and it is almost inevitable that at some point their tunnels will encounter those of the king’s loyal subjects, and the ancient malice against the royal house break into the open…
This book was a favourite of C.S. Lewis, who was a great admirer of MacDonald. And G.K. Chesterton accounted it one of the books most formative of his whole outlook on life:
But in a certain rather special sense I for one can really testify to a book that has made a difference to my whole existence, which helped me to see things in a certain way from the start; a vision of things which even so real a revolution as a change of religious allegiance has substantially only crowned and confirmed. Of all the stories I ever read … it remains the most real, the most realistic, in the exact sense of the phrase the most like life. It is called The Princess and the Goblin, and is by George MacDonald…
It really is a beautiful book, informed by courage and faith. On one level it is a rousing adventure story, of secret missions and clashing armies, but it has a mysterious register as well, a spiritual aura of goodness that emanates from Princess Irene’s great-great-grandmother, who lives, under enigmatic conditions, in the little-frequented upper passages of the castle.
I do not know much about MacDonald’s theology, but for me the “great, huge grandmother” is redolent of the Blessed Virgin: a loving, maternal figure, clad in blue, surrounded by stars, and possessed of a rare grace and quiet power. She makes an effective contrast with the horrid goblins who dwell under the ground.
MacDonald wrote a sequel to this book, called The Princess and Curdie, which does not seem to be as widely read. But we enjoyed this one so much that we may try it.