Princess and the Goblin (unabridged edition)

The Princess and the Goblin is a children's fantasy novel by George MacDonald. It was published in 1872. The sequel to this book is The Princess and Curdie. Anne Thaxter Eaton writes in A Critical History of Children's Literature that The Princess and the Goblin and its sequel "quietly suggest in every incident ideas of courage and honor."
There was once a little princess whose father was king over a great country full of mountains and valleys. These mountains were full of hollow places underneath; huge caverns, and winding ways, some with water running through them, and some shining with all colors of the rainbow when a light was taken in. Now in these subterranean caverns lived a strange race of beings, called by some gnomes, by some kobolds, by some goblins. They were not ordinarily ugly, but either absolutely hideous, or ludicrously grotesque both in face and form. It will become pretty evident why the little princess had never seen the sky at night. They were much too afraid of the goblins to let her out of the house then, even in company with ever so many attendants; and they had good reason, as we shall see by-and-by.