Protagonist Irene is an eight-year-old princess. She was born in a large castle on the mountainside but was sent to live with servants in a farm-castle nearby because her mother was too weak to care for her. Irene has “eyes like two bits of sky, each with a star dissolved in the blue” (1). Her room is decorated with stars as well, but she has never seen the real night sky. The reason for this is the humanlike race of goblins who live underground in the mountains. They once lived among the humans, but when the king imposed harsh sanctions upon them, they retreated to the caverns.

Over time, these goblin-people became extremely cunning, strong, and mischievous; they also grew grotesquely ugly. They developed a government with their own king and now spend most of their time causing trouble for the humans above, whom they view as usurpers of their land. The goblins rarely surface during the day or near places where humans venture, but they are occasionally seen. The people who live on the mountainside make their living mining ore from the caves and sometimes see goblins while working. It is because of these goblins that Irene is not allowed to go out at night.