This essay will probably be familiar to the administrator of this site, but as I have already shared a couple essays on fantasy theory, I figured it would only be fair to include this important title from one of the great original masters of fantasy (and a particular favorite of the administrator). Simply put, it is MacDonald's definition of a fairytale and is uses and implications. Enjoy.
http://www.george-macdonald.com/etexts/fantastic_imagination.html