A new novel for young adults written by Cornelia Funke captures and amplifies the dark magic of the original. Her prose explains many of the aspects of the film that defies explanation. Here's an example. We learn that the insect "fairy's" favorite game was change: "Change was in her nature. It was part of her magic and her favorite game."
This explains why the "fairy" readily changes form from insect to fairy to carnivore.
While the movie evokes images, Funke's prose also gives us each character's internal train of thought.
Funke says of Ofelia's mother, Carmen: "She sat once more in the wheelchair, as if the Wolf (the Capitan) had stolen her feet. He had crippled her."
All of this is metaphorical; Carmen can walk; she just cannot stand up for herself.
Carmen does not believe in magic or fairy tales, believing only delusions e.g. she believes she needs the villainous man, Vidal.
Funke states in another breathtaking passage that illuminate Carmen's thinking:
"We all create our own fairy tales. The dress will make him love my daughter, that's the tale Carmen Cardoso told herself, although her heart knew Vidal only cared for the unborn child he had fathered."
For a deeper understanding of del Toro's Pan's Labyrinth, read Cornelia Funke's version.