Del Toro divides the film between Ofelia's intricate, pedagogical fantasies and Vidal's machinations, which include terrorizing the local citizenry, humiliating his double-crossing housekeeper, Mercedes (Maribel Verdu, the depressed siren from Y Tu Mama Tambien, here thoroughly deglamorized), and plotting to do Carmen in once their child (a son, natch) is born. The girl's visions are helmed by a helpful/horrific faun (Doug Jones), who assigns a series of tasks that pit her against various monsters (including a giant toad and the eyeless, child-eating Pale Man) and test her capacity for loyalty.
Labyrinth's two halves dovetail here, as Del Toro—who also wrote the screenplay—slyly explores the intersection of patriotism, blind obedience, incipient madness and the lure of absolute power through the lens of an unhappy child's corroding psyche. It's a bold, innovative approach to which the director brings his customary iconography, from clicking insects to a preoccupation with time. What's most striking, however, is the deftness with which Del Toro weaves the film's disparate threads. The contemporary parallels are forceful without being overbearing or schematic (à la The Devil's Backbone), while Ofelia's visions are intense and elaborate but never distractingly baroque. Indeed, of the film's many cinematic forebears (including Neil Jordan's unjustly forgotten The Company of Wolves), it's most reminiscent of producer Val Lewton's RKO horror series from the 1940s in its deliberate pacing and slow-to-build chills. In an additional nod, Labyrinth builds to a climax that's respectfully evocative of The Shining, only hopeful and heartwrenching rather than coolly ironic.
For all these echoes back to subtle horror films past, Pan's Labyrinth is utterly original in scope and execution. Its hybrid mix of seductive fantasy and harsh reality, and its cast of nightmare creatures and their human counterparts, appeals on both an intellectual and an instinctive level. Nevertheless, labeling the film a fairy tale for adults sells it short: By running the West's ongoing flirtation with fascism and terminal warfare through the mill of childhood imagination and superstition, Del Toro proves that in scary times, the scariest lessons are still the most persuasive.