Just to clear the air here: Fauns aren't real. Neither are fairies, or giant toads, or pale men with hands for eyes that eat children (phew, we were a little worried about that one).
That's right; in Pan's Labyrinth we've entered the realm of the unreal…which can only mean we're in a fantasy. No, there aren't any high elves or dark elves or rings of power, but the creatures in the film are fantastical beings. They're creatures that fit within the context of Ofelia's world but that appear as mere stories or childish imagination to adults like Mercedes and Carmen.
And that's the key, a fantasy may have hyperreal creatures or abilities that defy the laws of nature, but they're always human stories, written for humans about the human experience. The creatures in this fantasy are all representative of Ofelia and her life in the human world.
But Pan's Labyrinth is more than just your normal fantasy adventure-type story. It's also a fable.
Fables are an age-old genre, generally told to children, which are used to teach some kind of moral or lesson at the end. Pan's Labyrinth has a sense of black and white morality: the purely good Ferreiro and Mercedes against the evil Vidal.
If we zoom out from Ofelia's story, we'll see that the bigger picture is the battle between the Falangist supporters of Spain's new government and the rebels continuing to fight against them.
It might be easy to dismiss this, saying that del Toro just needed a dramatic environment to force Ofelia to escape into her fantasy realm, but there are just too many parallels to ignore the importance of what is happening in the violent world of the adults.
Pan's Labyrinth is a story of war told through the eyes of an eleven-year-old girl who battles the evils of her fantasy world…even as the rebels fight similar battles in the historical world of 1944 Spain.