Having recently seen "Bridge to Tarabithia" on an airplane to Hawaii, I immediately drew comparisons to it within the first few minutes of Pan's Labyrinth. If you haven't seen Bridge, it's about a fantasy world created by two children to help them escape the harsh realities of growing up as outsiders in middle school. Don't worry, that wasn't a spoiler. It's very apparent at the beginning of the film that the fantasy is entirely their imaginations.
Where Pan differs, however, is that it is NOT a film for kids, even though one might looks past the R rating and see an 11 yr old main character, Ofelia. In fact, the violence in this movie reaches very high levels, as it takes place during the Spanish Revolution. There is a lot of blood, gore, and a suggested torture scene. It's a war movie with a fantasy twist. Myself, being a big fan of war movies, enjoyed all of the drama and action that war movies bring... from the cruelty of Captain Vidal, the main "bad-guy" to the heroics of the revolutionaries who sacrifice their lives for what they believe in.
The war drama that plays out in the "real world" parallels Ofelia's struggle as the daughter of her widowed mother, newly re-married to over-all bad guy Captain Vidal, and pregnant with is son nonetheless. Ofelia and her mother have just moved in with Vidal at his station on what is suggested is the front line of the revolution. Vidal's troops lay sentry at the bottom of a hill where the rebels lay wait for their big strike. Vidal, is pure calculated evil and this is crystal clear from his first scene in the movie. He has no remorse, no kindness, and nothing but contempt for everyone around him. He is probably one of the most enjoyable villins to watch in recent memory.
It also happens that Vidal's station is steps away from a large stone Labyrinth/maze, who's origins are so unknown that Mercedes, Vidal's kindly housekeeper, can only say that no one knows where it came from, just that it has always been there.
As legend has it, the King of the Underworld's daughter once left their realm to see the world of the humans, our world, out of curiosity. Having never seen sunlight, her memory and eyesight were taken away with her first glance at the sky. She lived in the human world until she died, never knowing that she was once a Princess of the underworld. The King, terribly saddened, knew her soul would come back and would be reborn to start a new life as a mortal human. So he made gates to the Underworld and hid them throughout the earth and waited, willing himself to never die until his beloved daughter returns. One such gate, and the last of it's kind, is Pan's Labyrinth. It is there that Ofelia will meet the faun, the last guardian of the gate to the Underworld, to find out if she is the true Princess reincarnated. This struggle, along with the horrors of living with the evil Vidal, and that of her dieing mother, who experiences some graphic and tragic complications from carrying Ofelia's unborn brother in her womb, and not to mention the rebel conflict, all interplay almost seemlessly. After you watch it the first time, you will want to watch it again to see how nicely these stories fit together into a story you won't soon forget. It's a morality play, a war drama, and fantasy rolled into one.
The "faun" in the movie is not actually the god "Pan" although he bears all of Pan's characteristics, goat horns, legs and all. The literal translation of the movie's title is "Labyrinth of the Faun". As faun's are not common knowledge in America, it was changed to Pan, a more recognizable mythological creature. Be warned, the violence is graphic, and it is subtitled, so don't take children unless you want them to be bored only to later have nightmares about children-eating monsters and the brutality of the human race at war with itself.