This story grew out of a foreword to George McDonald's story "The Golden Key". Tolkien intended to explain the concept of "fairy" and ended up creating a story. It developed into its own tale about the connection between the humans and the faery.
Inspired by the time one of J.R.R. Tolkien's son lost his toy dog, the tale of Rover, a young dog that will have lots of adventures after upsetting a wizard.