Lili's screenplay, written by Helen Deutsch, was based on a short story and treatment titled "The Seven Souls of Clement O'Reilly" written by Paul Gallico, which in turn was based upon "The Man Who Hated People," a short story by Gallico that appeared in the October 28, 1950 issue of The Saturday Evening Post.

Naive country girl Lili arrives in a provincial town in hopes of locating an old friend of her late father, only to find that he has died.

She is rescued by a handsome, smooth-talking, womanizing carnival magician, Marc, whose stage name is Marcus the Magnificent.

He strikes up a conversation with her through his puppets—a brash red-haired boy named Carrot Top, a sly fox, Reynardo, a vain ballerina, Marguerite, and a cowardly giant, Golo.

Soon, Marcus receives an offer to perform at the local casino and decides to leave the carnival, to the joy of Rosalie, who announces to everyone that she is his wife.

When Lili finds Marc's wedding ring in the seat cushions and tries to chase him, Paul stops her, calls her a fool, and slaps her.

[5] Walton and O'Rourke manipulated Marguerite and Reynardo, George Latshaw was responsible for Carrot Top, and Wolo Von Trutzschler handled Golo the Giant.

[7] The score was composed by Bronisław Kaper and conducted by Hans Sommer, with orchestrations by Robert Franklyn and Skip Martin.

He showered other encomia on Caron, calling her "elfin", "winsome", the "focus of warmth and appeal", praising her "charm, grace, beauty, and vitality."

He said screenwriter Helen Deutsch had "put together a frankly fanciful romance with clarity, humor, and lack of guile," and admires the choreographer, sets, music, and title song.

[11] The film was not universally liked, though; Pauline Kael called it a "sickly whimsy" and referred to Mel Ferrer's "narcissistic, masochistic smiles.

The story opens in a New York City television studio where Milly, a "sweet-faced girl with [a] slightly harassed expression," is about to make her farewell appearance on the Peter and Panda show.

Not realizing that this encounter was her audition, she is surprised when a station representative meets her and tells her "Your performance this afternoon came closest to what [Mr Villeridge] wants."

When she meets a nice man named Fred Archer and believes she is "a little in love" with him, she decides she can no longer stand Villeridge and his tyrannical ways.

Mr Tootenheimer, the "old philosopher", explains to her that every man is composed of many things, and that the puppets represent aspects of Villeridge's real personality: Millie cries "Crake!

They embrace, and Milly decides to say goodbye to "the outside world—reality—Fred Archer" and live with Villeridge and his created "Never-Never Land of the mind."

The Paul Gallico short story from which Lili was adapted was published in expanded form in 1954 as Love of Seven Dolls, a 125-page novella.

The puppeteer's assistant is a "primitive" Senegalese man named Golo, rather than the movie's amiable Frenchman, Jacquot.

The first four puppets she meets correspond closely to those in the film and are a youth named Carrot Top; a fox, Reynardo; a vain girl, Gigi; and a "huge, tousle-headed, hideous, yet pathetic-looking giant" Alifanfaron.

The book includes three additional puppets: Dr. Duclos, a penguin who wears a pince-nez and is a dignified academic; Madame Muscat, "the concierge", who constantly warns Mouche that the others are "a bad lot"; and Monsieur Nicholas, "a maker and mender of toys" with steel-rimmed spectacles, stocking cap, and leather apron.

It says that Golo was "childlike...but in the primitive fashion backed by the dark lore of his race" and looked upon the puppets "as living, breathing creatures", but "the belief in the separate existence of these little people was even more basic with Mouche for it was a necessity to her and a refuge from the storms of life with which she had been unable to cope."

His bitterness is explained by his identity as a former ballet dancer, disabled by a leg injury and "reduced" to the role of puppeteer.

No ballet dancer, he was "bred out of the gutters of Paris" and by the age of fifteen was "a little savage practiced in all the cruel arts and swindles of the street fairs and cheap carnivals."

In the book, however, Peyrot is the exploitative and abusive one, and the relationship with BalottMouche "passed in that moment over the last threshold from child to womanhood" and knew "the catalyst that could save him.

Peyrot does not respond, but he weeps; Mouche holds his "transfigured" head and knows "they were the tears of a man...who, emerging from the long nightmare, would be made forever whole by love."

Reviewing the book on its publication, Andrea Parke says Gallico creates "magic...when he writes the sequences with Mouche and the puppets."