It was in fairy-stories that I first divined the potency of words, and the wonder of things, such as stone, and wood, and iron; tree and grass, house and fire, bread and wine. (p. 69)
I have always been intrigued by G.K. Chesterton's passion for fairy tales as important precursors to a child's understanding of divine truths. C.S. Lewis echoed similar sentiments when he said, "Someday you will be old enough to read fairy tales again," implying that there is a hidden depth to these stories. Tolkien's lectures "On Fairy Stories" add to the conversation of the importance of these tales and why they continue to endure.
First, he defines a fairy story. It has much less to do with tiny, ethereal creatures than it does with the creation of a secondary world beyond the five senses. He coined a word for this place: the land of "faërie." Anyone can say "the green sun, but to make a secondary world inside which the green sun will be credible demands a special skill, a kind of elvish craft. (p. 140)
Just as humans are hard-wired for human language, so they are hard-wired to make stories out of that language, and to make a world out of their stories. Unfortunately fairy tales have been relegated to the nursery as shabby or old-fashioned furniture is relegated to the play room. (p. 43) But, writes Tolkien, fairy stories have more meaning for adults. Fairy stories offer in a peculiar degree or mode these things: Fantasy, Recovery, Consolation, all things which children, have, as a rule, less need of than older people. If fairy story is worth reading at all it is worthy to be written for and read by adults. They will, of course, put more in and get more out than children can. (p. 58)
Essentially, Lewis, Tolkien and Chesterton viewed fairy stories not as "untrue," but as stories within which the greatest truths are hidden. (See this quote on fairy stories as vehicles of grace.) That is why Chesterton calls the gospel "The Truest Fairy Tale" and why Tolkien writes, The Gospels contain a fairy-story, or a story of a larger kind which embraces all the essence of fairy stories. They contain many marvels - peculiarly artistic, beautiful and moving; 'mythical' in their perfect self-contained significance; and among the marvels is the greatest and most complete conceivable eucatastrophe [Christ's resurrection]. (p. 78)
This book is not light reading. Because Tolkien invents various words to describe his ideas, you are literally working your way through new language. But it's a worthy endeavor. The intro by editors Flieger and Anderson was very helpful.
One of my favorite quotes on fairy tales by Victorian author Juliana H. Ewing is here. I wrote two posts about them here and here.