The King of Elflands Daughter is a novel about the conflict between the mundane human world of Erl and the elfin magic of Elfland. This is a conflict that takes many forms in the novel and in reality: the conflict between Christianity and paganism, the human-made world and nature, dreams and practical reality, masculinity and femininity, childhood and adulthood.
Dunsany doesn't take sides in this struggle and both sides have their faults. The denizens of Elfland, for example, are immortal and time in their land moves very slowly, so that each moment may be appreciated in full by everyone. Therefore there is no hurry, stress or ageing in Elfland. As beautiful and desirable this may be, it also leads to almost complete stagnation (1). Ageing and death is a blessing, as it means change, growth and new people.
On the other hand, the human world can be cruel and rule-bound. When Lirazel comes to Erl, Alveric tries to convert her to Christianity. However, as an elf, a pagan being, she is, despite trying her best, unable to become Christian and would rather worship the stars. For this, she is shunned and treated with cruelty by the humans, even Alveric. In this and other matters, Lirazel is unable to conform to the human way of life, and keeps to her "elvish ways". She eventually returns to Elfland.
For while, no one is at fault in this conflict, the rational human world and magic can not co-exist.
For Lord Dunsany, the magical world is not at all mendable to human demands, but in fact much greater and powerful than humanity. It is not hard to see the influence he had on H. P. Lovecraft, not only in the Dream-cycle stories, but also in Lovecrafts more famous horror stories. Just as in Lovecrafts books, humanity is surrounded by immense supernatural forces, so large and powerful that they are largely indifferent towards humans, who they see as insignificant. Lovecraft used this "cosmic" perspective as the basis for his magnificent horror stories.
However, in Dusany's stories (and of course in Lovecrafts own fantasy stories) the magical is not only frightening, but also full of wonder and beauty. And this is perhaps the foremost reason to read The King of Elflands Daughter, for Dunsany's writing is, to me, simply deeply beautiful, both in content and form. His prose is unique, lyrical and dreamlike. It is often imitated, but rarely sucessfully.
Of course, the novel shows it's age at times and is far from perfect. The foremost weakness of the book was for me was the story of Orion, the son of Lirazel and Alveric. He is, as befits his name, a hunter, and spends a large part of the novel hunting unicorns with dogs at the borders of Erl and Elfland. The narrative doesn't condemn his actions and even celebrates them, which isn't surpsing considering the book was written in 1924, but it is hard for a modern person not to view Orion's actions as cruel and brutish, making these parts somewhat unpleasant to read (2). There is also a very silly plot development, in which Orion gets help hunting from trolls, that wouldn't seem out of place in a Terry Pratchett novel.
I was compelled to contrast this with T. H. White's The Once and Future King, in which unicorn hunting is also portrayed, but there as a cruel destruction of beauty, which to me is a much more relatable perspective, than Dunsany's enthusiasm for trophy hunting.
On the other hand, there is much beautiful writing even in these weaker parts of Dunsany's book. The depiction of Orion's childhood and coming of age are one of the best parts of the book and the encounter of the trolls with the Human world is very beautiful, as is the chapter in which the trolls convince the will o' the wisps to help Orion hunt.
So, despite some flaws, this is an incredible and very beautiful book, one of the foundation stones of the fantasy genre. As Lovecraft put it in his essay Supernatural Horror in Literature:
"... no amount of mere description can convey more than a fraction of Lord Dunsany’s pervasive charm... To the truly imaginative he is a talisman and a key unlocking rich storehouses of dream and fragmentary memory; so that we may think of him not only as a poet, but as one who makes each reader a poet as well."
(1) This is an idea Tolkien would later explore in The Lord of the Rings and The Silmarillion, in which the elves stagnate due to their near-immortality.
(2) Lord Dunsany was a keen hunter himself, and these parts of the book are probably based on his own experiences fox-hunting with dogs. This form of hunting is now banned in the UK. Interestingly, Dunsany, despite being a hunter, was also a animal welfare activist, active within the Royal Society for the Prevention of Cruelty to Animals and even president of it's West Kent branch.