Strahan had published the story and illustrations as a serial in the monthly magazine Good Words for the Young, beginning November 1870.

Anne Thaxter Eaton writes in A Critical History of Children's Literature that The Princess and the Goblin and its sequel "quietly suggest in every incident ideas of courage and honor.

"[2] Jeffrey Holdaway, in the New Zealand Art Monthly, said that both books start out as "normal fairytales, but slowly become stranger", and that they contain layers of symbolism similar to that of Lewis Carroll's work.

Unknown to her, the nearby mines are inhabited by a race of goblins, long banished from the kingdom and anxious to take revenge on their human neighbours.

One rainy day, the princess explores the castle and discovers a mysterious lady who identifies herself as Irene's namesake and great-great-grandmother.

[4]: 48 MacDonald’s depiction of the goblins portray them as descendants of individuals who had fled underground to escape from the strict laws of society.

But for some reason or other, concerning which there were different legendary theories, the king had laid what they thought too severe taxes upon them… According to the legend, however, instead of going to some other country, they had all taken refuge in the subterranean caverns.”[6] This synthesis of folkloric and anthropological elements reflected a persistent evolutionary theory in contemporary Victorian society, which conflated mythological tales of fairies with folk memories of primordial race.

This is MacDonald’s attempt to synthesise scientific, pagan and Christian elements into a single unified system of ethics and morals.

It has been observed, however, that this final sequence is both shocking and disturbing, depicting as it does the extermination of innocent animals alongside the ‘evil’ goblins.

This Hungary/Wales/Japan co-production, created at Budapest's PannóniaFilm, Japan's NHK, and S4C and Siriol Productions in Great Britain, starred the voices of Joss Ackland, Claire Bloom, William Hootkins and Rik Mayall.