What one reviewer at amazon said about The Princess And The Goblin:
Dang, but this is good! I can see why Lewis and Tolkien, the acknowledged kings of fantasy, loved it. Written long before the Hobbit, I'd say that this might be the first kid's fantasy book still published today.
Young Princess Irene is kept in ignorance of the ghastly goblins that live under the mountains--neither she nor any of the castle staff are allowed out after dark. But when she and her nurse Lootie accidently stay out too late, a hideous creature chases them and nearly catches them. Because of that, Irene meets the young miner boy, Curdie, who knows the weaknesses of the goblins.
After her narrow escape, Irene is drawn up into abandoned parts of the castle to where her great-great-grandmother lives, surviving on pigeon's eggs--also a wonderful character, somewhere between a guardian angel and a grandmother. Her shifting forms, subtle magic and enigmatic speech are mesmerizing. The enchanted bath scene is worth the book alone!
Irene and Curdie are human yet excellent role models for kids. Irene appears to be only seven or eight, but tries to carry herself as a princess at all times, with bravery and dignity (she doesn't always succeed, but it's never shown as being a GOOD thing). Curdie is also brave and dignified, a prince in the spirit with humble roots.
And the goblins? Well, I got nightmares when I was little from some of the descriptions, but if you can read, say, Harry Potter (not as good) without freaking then you should have no trouble.
This is probably the earliest fantasy, and one of the best.
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