[1] Walpole was inspired to write the story after a nightmare he had at his Gothic Revival home, Strawberry Hill House, in Twickenham, southwest London.

[2] The novel initiated a literary genre that would become extremely popular in the later 18th and early 19th century, with authors such as Clara Reeve, Ann Radcliffe, William Thomas Beckford, Matthew Lewis, Mary Shelley, Bram Stoker, Edgar Allan Poe, Robert Louis Stevenson and George du Maurier.

This first edition purported to be a translation based on a manuscript written at Naples in 1529[1] and recently rediscovered in the library of "an ancient Catholic family in the north of England".

In the second and subsequent editions, Walpole acknowledged authorship of the work, writing: "The favourable manner in which this little piece has been received by the public, calls upon the author to explain the grounds on which he composed it" as "an attempt to blend the two kinds of romance, the ancient and the modern.

The first edition was well received by some reviewers who understood the novel as belonging to medieval fiction, "between 1095, the era of the First Crusade, and 1243, the date of the last", as the first preface states; and some referred to Walpole as an "ingenious translator".

[6] Following Walpole's admission of authorship, however, many critics were loath to lavish much praise on the work and dismissed it as absurd, fluffy, romantic fiction, or even unsavory or immoral.

This inexplicable event is particularly ominous in light of an ancient prophecy, "that the castle and lordship of Otranto should pass from the present family, whenever the real owner should be grown too large to inhabit it."

with supposedly real people acting in a "natural" manner, Walpole created a new and distinct style of literary fiction, which has frequently been cited as a template for all subsequent gothic novels.

[11] The Castle of Otranto is widely regarded as the first Gothic novel, and, with its knights, villains, wronged maidens, haunted corridors and things that go bump in the night, is the spiritual godfather of Frankenstein and Dracula, the creaking floorboards of Edgar Allan Poe and the shifting stairs and walking portraits of Harry Potter's Hogwarts.Set in a crumbling castle with all the now-classic gothic trappings (secret passageways, bleeding statues, unexplained noises and talking portraits), it introduced the haunted house as a symbol of cultural decay or change.

[1] It blends elements of realist fiction with the supernatural and fantastical, establishing many of the plot devices and character types that would become typical of the Gothic novel: secret passages, clanging trapdoors, pictures beginning to move, and doors closing by themselves.

The allusion to Hamlet's experience with the Ghost is meant not only as a "template of terror," but also to make readers feel as if they are watching the play itself, and Walpole does this on three occasions.

Second, when Friar Jerome informs Theodore of the dangers to be found in Otranto and calls for him to take revenge, this is a direct allusion to the Ghost's demand to Hamlet to remember him.

[15] The violent question of bloodlines and succession serves as a key element in many of Shakespeare's plays, from Hamlet to Richard II and Macbeth, and it is clearly one of the major concerns of Otranto.

Like Shakespeare, Walpole aims to create a "mixture of comedy and tragedy,"[16] and one of the ways he does so is by using the minor, servant characters (such as Bianca) as comic relief.

[19][20] The Castle of Otranto is seen as establishing a literary foundation in which sexual desire and transgression is a defining thematic undercurrent of the new genre of the Gothic.

At that point, the critics and populace who had praised it turned on the book, claiming it was superficial, and other pejoratives generally assigned to romantic novels, which were seen as inferior in Britain at that time.

The novelist Clara Reeve wrote The Old English Baron (1777) as a response, claiming she was taking Walpole's plot and adapting it to the demands of the time by balancing fantastic elements with 18th-century realism.

[1] She explained: This Story is the literary offspring of The Castle of Otranto, written upon the same plan, with a design to unite the most attractive and interesting circumstances of the ancient Romance and modern Novel.