Tolkien begins his essay with an exploration of what constitutes a "fairy-story." He disagrees with the traditional definitions, as found in the dictionary, as being either too narrow or too broad; it does not have to contain actual fairies, and yet it is something more specific than simply an untrue or unrealistic story. He finds distasteful the condescending moralizing of many so-called "fairy-tales," and he puts forward the legend of Arthur as a better fairy-story than Drayton's Nymphidia, which contains actual fairies. What, then, is a fairy-story?
A fairy-story is a narrative that takes place in, and transports the reader to, Faërie. Tolkien does not define Faërie explicitly, claiming it's impossible to do so, but it is perhaps more clearly known as "the Perilous Realm," a place that holds fairies along with the sky, the seas, and everything else in its imaginative grasp. Further explanation is impossible; as Tolkien says, "Faërie cannot be caught in a net of words; for it is one of its qualities to be indescribable, though not imperceptible." His point is that it's a land beyond physical reality, and it's possible to know when you're in it, but its quality can't be put into words.
Tolkien then analyzes various examples of things that have been called fairy-stories to see if they actually are so. He moderately accepts Andrew Lang's collections as moderate examples of fairy-stories, although not without their faults. Grimm's Fairy Tales are similar but not quite what he's looking for, and he absolutely refuses to accept Gulliver's Travels and the like ("travellers' tales) as fairy-stories. Tolkien also rules out anything that uses human dreams as the primary mechanism of Fantasy, as Faërie must be presented as 'true' (excluding Carroll's Alice stories). He then moves on to exclude 'beast-fables,' stories like Aesop's fables that make animals behave like humans to teach a moral lesson.
In the next section, Tolkien lightly passes over the question of the origins of fairy-stories, admitting that he is not an expert on the subject while affirming that they are rather ancient indeed. It is here that Tolkien first lays out his idea of sub-creation; just as God has created man and the rest of the universe, material and immaterial, man also creates in the image of God, using pre-made material and arranging it to form something new. Fantasy is the highest form of sub-creation, as creating a secondary world mimics God's actions in creating a primary world.
The third and final question Tolkien examines (after the nature and origin of fairy-stories) is their applicability for children. Why are fairy-stories assumed to be only relevant for children? Tolkien argues that good fairy-stories should be read by children and adults alike, as their applicability is not limited to age, and it is perhaps beneficial for adults to put on the credulity of children again. He also states that fairy-stories that have been watered down for children are almost abominations, taking out the peril of Faërie and thus the essence of its sublimity.
The next division of Tolkien's essay is primarily concerned with Fantasy. Here, he takes up the issue of terminology; words have gotten so muddled that the relevant words no longer have the correct meaning. He says that Imagination is the "mental power of image-making," and Art is the medium by which Imagination can lead to Sub-creation. The quality of strangeness and wonder that overarches the entire process is called Fantasy, which Tolkien argues is the highest and most pure form of Art. Well-executed Fantasy includes the creation of a Secondary World, eliciting Secondary Beliefs from the readers through an 'inner consistency of reality.'
Literature is the best vehicle for Fantasy, as it involves the greatest exercise of the Imagination and is not limited by visual definition, as are dramatic productions and paintings. Tolkien also argues here for a distinction between Enchantment and Magic; Enchantment creates a wondrous Secondary World, while Magic merely causes alterations in the Primary World. The former is clearly more desirable for a good Fantasy, which is, according to Tolkien, a natural and beneficial human activity. Fantasy can be used for evil, but "of what human thing in this fallen world is that not true?" (144). Fantasy is a human right as a result of our status as Creations of the Creator.
Tolkien then transitions to a discussion of three fundamentally good qualities of fairy-stories: recovery, escape, and consolation. Recovery is "a recovery of clear sight;" it is making the familiar strange again, like a palate-cleanser for an intellectual lens. For example, a fairy-story may contain a world in which the grass is blue. Coming back to the physical world, it strikes the reader that the grass is green, and that this is something to wonder at and enjoy. Recovery is a sort of antidote for taking things for granted in the "real world."
The concept of escape is rather self-explanatory. Tolkien doesn't shy away from the argument that fantasy is escapist; in fact, he acknowledges it and claims it as a benefit. We live in a fallen, broken world, and becoming involved in Faërie isn't "the flight of the deserter" but "the escape of the prisoner." The world of Faërie, moreover, might in some senses be even more "real" than the Primary World, being closer to the Imagination and the beauty of God.
The third and final element of fairy-stories is consolation: the joy of the happy ending. Tolkien calls this element eucatastrophe: a sudden joyous 'turn' at the end of the story in which death is avoided and darkness is foiled. It does not deny the possibility of failure, or dyscatastrophe, but it triumphs over it and foreshadows the ultimate defeat of Death at the hands of Life, giving a reader a fleeting glimpse into the heart of Joy.
In the Epilogue, Tolkien compares these elements of a fairy-story to the Christian story. He argues that the death of Christ and his subsequent resurrection is the ultimate eucatastrophe, where the 'sudden joyous turn' is the triumph of Life over Death. Tolkien concludes the essay by theorizing that, by creating Fantasy, man is adding to the richness of the created world and may actually be moving closer to the truest form of Being, which will be fulfilled at the eschaton.
