Pan's labyrinth is a cinematic masterpiece that manages to be equally as whimsical and full of childlike wonder as it is gritty and realistic.

If one is inclined to, there are nitpicks to be made. The pacing could use a little(and I really do mean a tiny bit) of tightening up, and the CGI hasn't aged gracefully. But there's no point in participating in an exercise like this.

Pan's Labyrinth is, as a package, a near perfect movie. It masterfully sets up a fantastic, and cohesive, world before telling a brilliant story in it. It says so much, but knows how to leave the best things left unsaid.
The acting is wonderful. The cinematography is excellent. The sound design wraps it all together. Needless to say(unless you aren't familiar with Del Toro's works), the creature designs are magnificent, entirely unique yet reminiscent of so many things, no doubt inspirations upon which Del Toro built upon.

The contrast between the two worlds Ofelia experiences is stark, yet the transitions make it work perfectly.
It truly does evoke feelings of reading a fairy tale as a young kid; being so immersive is a feat very few movies can claim to have accomplished.