Necessity of Pan's Labyrinth

Even though Pan's Labyrinth was a "fantasy" film, it was also realistic. This realism is what makes the film so great.
Having the story occur with a real historic even adds to the "believability" and the ability for the audience to relate to the situation of the characters. One of the keys to a great film is that every element adds to the plot/story. Nothing is able to be trimmed. Lets say that the civil war was chopped out. Now where is my real life situation? The variables that the war brought help bring out the character of the Captain, and just how evil he was. If there was no civil war then the Captain would have been home rather than tending to the outpost. This means Ofelia would have never gone and met the faun. The civil war was a necessary tool to get Ofelia on her journey. 
It can also be argued that the director/writer could have used some other scenario instead of the civil war. Perhaps something that would have never happened in our history. This would be horribly useless. An audience needs this fantasy to be pulled back to reality. The audience needs to relate. The ability to relate to a story allows the audience to become more accepting of the validity and therefore, more emotionally invested in the characters/protagonist. The more emotionally invested the audience is the larger the emotional release/catharsis is in the end of the film. I am not saying this means the audience will take this story  as history. As a member of the audience I allow a film I watch (a convincing one) to throw me into their "story" or "reality". I become apart of the story. 
The civil war was essential to the story. Ofelia needed to escape our world and get to her real parents. This is a spanish film. So the director needed to pick an even that was notable to him and to his people. This would definitely be a spanish historical event. 
The civil war also made this fantasy more for adults who could understand the events that had already happened. 
Sure, this film could have been told as a gothic fantasy. However, it would have not been as effective. It would have just been another wacky fantasy movie. Elements of the story are subjective to the director and producers. His choice was necessary to the success of his film being unique and not just another "kiddie" fairy tale. 
Both worlds were needed.
The themes of obedience/disobedience and sacrifice occurred throughout the film. Ofelia had to deal with the obedience factor with her mother, the Captain, and the faun. She would be disobedient to all of the characters, but eventually she would become obedient toward some of them. For instance she destroys the dress that her mother got her and gets filthy for the dinner party . Ofelia does feel remorse about the stress that she causes her mother. Also she places the bowl of the mandrake root and milk underneath her mother's bed knowing the Captain would not approve. She also does not listen to the faun about her mission and causes the fairies deaths. She would eventually come to listen to the faun and try to follow his rules. She also decides not to grow up like her mother mentioned when she saw Ofelia was still reading fairy tale books. Ofelia chooses a completely different world. Her  biggest disobedience would be leaving the kingdom because of her curiosity. 
The theme of sacrifice in the film was beautifully presented. At first it seems like she would have to sacrifice her brother to get back to her kingdom, but that would not really be a sacrifice at all. Like the faun tells Ofelia that she does not even know this child that has caused her so much trouble. Ofelia denies the faun and makes the ultimate sacrifice of not being able to go home for her little brother, which would allow the Captain to shoot her. She sacrificed herself instead of her brother which would allow for her to go back to the kingdom. 
This ending was fantastic and allowed for an intense emotional release of the audience. 
Perfect.