WHAT APPEARS TO demarcate the horror story from mere stories with monsters, such as myths, is the attitude of characters in the story to the monsters they encounter. In works of horror, the humans regard the monsters they meet as abnormal, as disturbances of the natural order. In fairy tales, on the other hand, monsters are part of the everyday furniture of the universe. For example, in “The Three Princesses of Whiteland,” in the Andrew Lang collection, a lad is beset by a three-headed troll; however, the writing does not signal that he finds this particular creature any more unusual than the lions he had passed earlier. A creature like Chewbacca in the space opera Star Wars is just one of the guys, though a creature gotten up in the same wolf outfit, in a film like The Howling, would be regarded with utter revulsion by the human characters in that fiction.
Boreads, griffins, chimeras, baselisks [sic], dragons, satyrs, and such are bothersome and fearsome creatures in the world of myths, but they are not unnatural; they can be accommodated by the metaphysics of the cosmology that produced them. The monsters of horror, however, breach the norms of ontological propriety presumed by the positive human characters in the story. That is, in examples of horror, it would appear that the monster is an extraordinary character in our ordinary world, whereas in fairy tales and the like the monster is an ordinary creature in an extraordinary world. And the extraordinariness of that world—its distance from our own—is often signaled by formulas such as “once upon a time.” […]
As I have suggested, one indicator of that which differentiates works of horror proper from monster stories in general is the affective responses of the positive human characters in the stories to the monsters that beleaguer them. Moreover, though we have only spoken about the emotions of characters in horror stories, nevertheless, the preceding hypothesis is useful for getting at the emotional responses that works of horror are designed to elicit from audiences. For horror appears to be one of those genres in which the emotive responses of the audience, ideally, run parallel to the emotions of characters. Indeed, in works of horror the responses of characters often seem to cue the emotional responses of the audiences.