Pan’s Labyrinth is not so much a children’s movie. It’s about children, but that’s not really the same thing. Easy mistake, since it’s called a fairy tale and that has certain cultural references for us, but think the original Grimm’s stories.
Which were, admittedly, cautionary. I guess you could take your kid to Pan’s Labyrinth as a cautionary measure against him or her becoming a fascist military officer, but there may be better ways to accomplish that.
Really, though, it’s a fairy tale about the Spanish Civil War. Three acts, three tasks, three parallels to those tasks in the adult world. Ofelia and Mercedes begin by capturing keys; the second task is taking a dagger, mirrored by Mercedes’ knife (and her later use of it). And finally, Ofelia’s choice regarding her brother is precisely Captain Vidal’s choice regarding Ofelia’s mother Carmen — what’s a life worth to you?
Or, perhaps, it’s Mercedes’ choice about Vidal. Hard to say. Is Vidal’s search for information about the rebels likewise a parallel to the quest for the key? Are his torture instruments his dagger? You could read it that way, although I think that’s perhaps a bit more multi-layered than del Toro intended. The pivot point of Ofelia’s brother is enough of a nexus for the parallel quests for me.
On the other hand, I’m perfectly content to assume that the fantasy kingdom is Spain without Franco. Only makes sense.