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A lot people get hung up on this films tag as a "children's film", and that it certainly is, though it is one made for adults. Takashi Miike uses the fantasy genre, particularly, the children's fantasy genre, as a springboard into the wild territory that is the Great Yokai War.
The setup is simple a boy is selected to play the "hero" in this years annual festival, only to discover his role is much more real than he could have imagined. What follows is a hallucinatory, grotesque, whimsical, and often funny journey through the world of Japanese folklore, but wait there's also an evil Villain on the lose who wants to destroy the world. However, the villain here, is not a mere demon, it is the demon-spirit of the accumulated resentment of those things which humans "use" and "discard". Usuing a chamber made out of pure liquid hate/resentment, the villain transforms the vibrant colorful Yokai spirits into soulless ten foot tall makeshift robots which chainsaw for arms and eyes like burning coals(those whove played the video game, Sonic The Hedghog, might remember a certain Dr. Robotnik performing similar procedures to the cute and cuddly's who Sonic had to then "liberate").
The hero in this film is actually the least interesting character, essentially playing the straight man, in a world gone suddenly mad. Though he does go through the typical heroes trials he more often than not cowers, as do many of the Yokia themselves, who seem truly defenseless against the murderous robots, some spirits being umbrellas with eyes, talking walls, or creatures whose soul purpose in life is to count beans...of course in this magical world of Miike's Yokai war even beans take a magical power when one believes in them.
In several ways this film subverts the normal conventions of children's fantasy, as few, if any, of the characters are heroic, their victory being a combination of happenstance, almost arbitrary faith, and a desire to party. The Yokai spirits, only rally together and lay siege the villains hideout, after they mistake the end of the world invasion of Earth for a great Yokai festival, and even then only to dance and party. Also the film ends not with the usual celebratory all's well that ends well fantasy ending, but with a final scene, showing our hero years older, with an adult job, now unable to see the Yokai spirits of his youth, who then despondently turn to the villain, who being a spirit can never really die. This ending, with it's Yokai spirit who is the spitting image of Pokemon's Pikachu, warns us not just of leaving behind our childhood selves, but of the horrors of over-consumption. The villain is resentment caused when humans no longer have reverence for the world and the objects around them(in Japanese folklore nearly every object has some kind of spirit), and so when they are used and discarded as we in consumer societies do without reverence, they become soulless vengeful machines, not unlike those seen in modern video games, suggesting that though our imaginations and myths do not ever really die, but can become deformed.
This is one of the first scripts Miike has contributed to, and I believe it shows, as there's a tightness conceptually that sometimes gets swept under the rug by his exuberance for visual playfulness. Though I've focused mostly on the story (since lots of users here seem to write it off), I do want to say that visually it's a kaleidescope of CGI, stop animation, costume, and live puppetry, that works remarkably well. There's a dreamlike quality to a lot of the film, and the Miyazaki comparisons are warranted, as are the NeverEnding Story and Labrynth comparisons, though this film is sharper and more adult than either. The Yokai are beaten, brutalized, and turned into machines of living hate, who I believe even kill a few humans, a deformed aborted calf with a mans face is born and dies in the films grotesque opening, while a sexual undercurrent, the women with the long neck licking the face of our boy hero, or another characters persistent memory of touching the thigh of a young scantily clad water spirit as a boy, seem to linger a bit too long for most western tastes, especially when considering this is a "children's film". However these are slight enough to catch adult attentions while minor enough, not to traumatize any children to bad. Grims fairy tales, before revisions, did much worse, far more often.
All and all this is one of Miikes most accessible and engaging ventures yet, with enough visual drama and great performances(the Yokai spirits have a humanism and an absurd humor to them, thats laugh out loud funny at times) to appeal to audiences of all ages, and a steady conceptual undercurrent strong enough to draw in an adult audience who have presumably brought their children or else come out of a sense of nostalgia for the long lost fantasy films of their youth. The latter group the film seems to address the most fervently asking that they not just continue passive consumption of the world around them, but show reverence to those spirits within them which seemed so much closer to reality in childhood. Another beautiful, funny, and truly original film from a thrilling director who hasn't come close to his apex. Instant classic.


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