George MacDonald's Lilith

Lilith captured my imagination and held it prisoner until I had finished.

It was obvious to me that CS Lewis was impacted greatly by MacDonald. Sections of the story smelled like Narnia - but older, with a heady aroma of Aurthur and a savory, Beowulf-like finish.

Lilith contains a feeling that differentiates what I call "fairy stories" from other fantasy - a sense that magic is organic to the whole. I don't mean that fairy stories seem more real than works by Tolkien or Asimov, but that they seem more... well, magical.

You can hardly read The Lord of the Rings, or even The Hobbit, without being aware of a whole world humming quietly and reasonably in the background. Every action and town has a history and even tradition behind it. But in a fairy story - in Lilith - we are simply told how things are, and what happens next. The main character has no way of discovering the source of magic at work behind-scenes, and usually knows very little about backstory. Hence, the reader is carried along as if by the same magic, in total suspension of disbelief.

CS Lewis wrote a review of The Lord of the Rings, and in that review he talked about the value of myth, and also of the debt our creativity owes to the Creator:
The value of myth is that it takes all the things we know and restores to them the rich significance which has been hidden by ‘the veil of familiarity’… If you are tired of the real landscape, look at it in a mirror. By putting bread, gold, horse, apple, or the very roads into a myth, we do not retreat from reality: we rediscover it. As long as the story lingers in our mind, the real things are more themselves.

( I am told that the full review can be read in Lewis's Essay Collection and Other Short Pieces  (London: Harper Collins). Although I am positive that this is not where I read it, I've not taken the time to go through my library, so you may as well look there as elsewhere if you're interested.) 

I believe this perfectly explains the value in fairy stories (as I've defined them) and Lilith in particular. It is not the believability of new worlds but the humility that comes with suspension of disbelief that makes our re-discovery of truth powerful. In a word, it encourages child-likeness.
But Jesus called the children to him and said, “Let the little children come to me, and do not hinder them, for the kingdom of God belongs to such as these. 17 Truly I tell you, anyone who will not receive the kingdom of God like a little child will never enter it.” (Luke 18:16-18 New International Version, ©2010)

One final note - if you do read and appreciate Lilith, I strongly suggest you also get your hands on Phantasties. Lilith reminds me of The Magician's Nephew, and The Last Battle (albeit with a more difficult writing style). Phantasties reminds of Prince Caspian and The Silver Chair.