Science Fiction, Dystopian Literature, Philosophical Literature
The Lathe of Heaven probably isn't what you think of when you think of sci-fi, which is usually full of strange languages, aliens, space travel, and epic battles. Yeah, the novel has aliens, but even they are more like giant sea turtles than anything else.
So what makes this novel science fiction? Well, there's still a lot of classic sci-fi stuff, like parallel universes, strange new technologies, and speculation on what the future will be like for humanity. But Ursula Le Guin's novel is a little different, because it focuses more on inner space than outer space.
That's because Le Guin was a part of a new wave that rejected genre-based science fiction, which only focused on external things like outer space, aliens, laser guns, and that sort of stuff. Instead, these new-wave writers focused more on things common to literary fiction, like the psychological effects that science has on people. The Lathe of Heaven follows in this tradition because it focuses on George's reaction to his new power and to the world changing around him.
Dystopias and Taoism
The Lathe of Heaven opens up in a future that seems pretty dystopian, but as the novel continues, Dr. Haber attempts to change the world into a utopia. His plan doesn't work as well as he imagined it would, and he gradually makes the world even more of a dystopia than it was before.
So why does that happen? That's where the philosophy and the Taoism come in.
In another novel, Dr. Haber might have been the hero—after all, who wouldn't root for a guy who is trying to make the world a better place? Well, Le Guin is all about examining motives. In the context of Taoism, Dr. Haber is a destructive force. He wants to change things and take them out of their natural order, and he wants to do it primarily because he wants power, not because he really wants to help without reward. According to Taoism, this will only lead to destruction and death. So even though Dr. Haber thinks he's trying to do a good thing, it's precisely that trying that makes more bad things happen due to his motivations.