One of the central oppositions of this wonderful poem is that of the "art" of the Lady of Shallot and her weaving, and the reality that is seen so strongly in Sir Launcelot as he comes bursting into her view.
We are told that the Lady of Shallot lives embowered in her tower and she can only see the world through the reflection of her mirror. Her vision of the world therefore becomes two dimensional, and this is an impression that is increased when she incorporates what she sees of the world outside into her weaving - her "art".
The Lady can therefore be seen as an artist in the sense that she is so involved with her work and with her art, that she is not able to live real life herself. It is when she looks out of her window without the mediation of the mirror, that her "art" in the form of her weaving and the mirror break and "the curse" comes upon her. The impact of real life renders her art null and void.
This touches on a key Victorian debate that Tennyson captures in this poem - the extent to which an artist can be part of and live in real life whilst at the same time from his objective position as an artist (and by that we mean poet or novelist as well) capturing what he sees in real life and creating amazing works of art. If you look at a man like Henry James, who produced incredible novels, arguably he was only able to do that by rejecting and not living in the real world - something that Colm Tolblin's recent work The Master captures brilliantly.
According to the reference on Linguistics, the definition of an allegory is:
"An allegory is an extended metaphor, especially a story in which fictional characters and actions are used to understand and express aspects of concepts relating to human existence."
Based on this definition, "The Lady of Shallot" relates to the lives of women in the Victorian period, the restrictions that were placed on them, the lack of choices they had and the domination of their lives almost exclusively by men.
If you look at the poem as an extended metaphor for the Victorian woman's lack of choice, the confinement of the lady in the tower can be interpreted as the control put on young women as a way to keep them protected from illicit experiences to preserve their purity so that when their father or male relative was ready to make a marriage arrangement they would be very marketable.
Victorian women were possessions in the eyes of their families, they were to remain close to home preparing for marriage, doing needlework, if an upper class young woman, maybe reading, certainly learning the social graces that would be required to be a wife.
Her life was defined by her father who controlled her existence, choosing suitors, making a choice for a husband did not necessarily relate to love, but financial security. Therefore, the lady in the tower is prevented from engaging in romantic adventures to protect her virtue. The curse that contains her is never defined, it can be viewed as a protective father or a controlling family, and like teenagers today, the young woman glimpses a handsome bad boy and escapes from her tower to pursue him.
She, of course, outside the protective walls of her tower, her home, is subject to harm. Technically, if you are looking exclusively at the metaphor, the young woman is figuratively dead to her family once she disobeys their rules. She violates the rules of her family, dishonors their name and acts in a way that dishonors herself, and if she does not marry the man she chased after, she will have a difficult time marrying someone else.
The tower is symbolic of the protection placed around young women so as to prevent them from falling prey to young men prowling for sexual adventures which is viewed by the young women through the lens of romance and true love, ends up being defiled by the experience, therefore she must be protected because the world beyond the walls of her tower, home, are dangerous.
There are so many stories from this period known as the Romantic period in literature that chornicle a young woman running away with a rogue and ending up either with child or in some convent hiding from her stricken family.
"One of the concerns at the heart of the political (as well as intellectual, social, and cultural) life of Tennyson's nineteenth-century context is, as criticism generally acknowledges, the "Woman Question." While "The Lady of Shalott" addresses this question, it does so, as will be shown, in a systematically ambivalent manner, at once upholding and dislocating patriarchal assumptions about the issues which the question entails—those of gender, sexuality, the institution of marriage, and the space occupied by women in society."