How is the structure of "Once Upon a Time" similar to that of a fairy tale?

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You are referring to the narrative structure of the story. In this instance, one must look at the sequence of events to see whether it is similar to that of a fairy tale. The elements of such a structure are setting, plot, and theme. A narrative plot is further divided into the exposition, rising action, climax, falling action, and the denouement or resolution.

In the exposition, the characters are introduced and the setting is provided. A normal fairy tale does not provide a specific time frame and begins with 'Once upon a time.' This is the first obvious similarity between our story and a fairy tale. Although the introduction is not used in the text of the story itself, it is clear in the title, which uses exactly the same terminology.

Secondly, the fairy tale provides insight into the characters' situation - i.e. where they live, their relationships and what they do. The story commences with the following words:

In a house, in a suburb, in a city, there were a man and his wife who loved each other very much. . .

There is, however, an immediate deviation from the usual format of a fairy tale when we read

. . .and were living happily ever after.

This particular sentiment is normally found at the very end of a fairy tale, after all issues have been resolved. The suggestion here is that the family initially believed that they were living in ideal circumstances which would ensure perpetual happiness. 

The story then resumes the normal pattern of a traditional fairy tale in the exposition, which enhances our understanding of the characters and their circumstances. We learn about where they live, how they live and their relationships with other characters. There is even a reference to the grandmother being a "wise old witch," which supports the idea of this being a fairy tale, given that references to fantasy and fantastical characters are common in such stories.

In the exposition, we are informed of the issues the family faces. This aspect also follows the model of a traditional fairy tale. The rising action is defined by the parents' increasing paranoia and their continued attempts at ensuring their safety and security. This leads us to the climax.

In an ironic twist, our story does not have a happy ending, as in a normal fairy tale. There is no falling action or resolution. The reader is shocked at the dramatic and tragic turn of events. The family is, in the end, left shattered; their "happily ever after" has become a nightmare.

Finally, each fairy story teaches a lesson and "Once Upon a Time" does not deviate in this regard. The lesson to be learnt is that one should be wary of the dangers inherent in irrational fear and paranoia, since responding to these unjustified sentiments could do more harm than good.

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"Once Upon a Time" has several elements commonly found in modern fairy tales.

The insurance and security features purchased by the family can be seen as “magical” in a sense that they are believed to prevent crime.

Fear of the “colored” people outside the city is the villain.

Notice that the villain in "Once Upon a Time” is the characters’ perceived fear and not the individuals.

The parents and their son live like royalty. The husband’s mother is described as “a wise old witch.”

There are three distinct actions that lead to their child’s death at the end of the story that grow in severity, including purchasing insurance and joining a neighborhood watchdog group, limiting servant access which leads to fear of more unrest, and the installation of alarms and, eventually, the barbed wire that traps the child when he tries to climb the fence.

The ending of "Once Upon a Time," like most fairy tales, has a moral.

Nadine Gordimer's story cautions individuals to use reason and logic to address security concerns.

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