In The Monkey's Paw, the critic G. K. Chesterton said that "His horror is wild, but it is a sane horror." What does Chester mean by this?

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The story certainly has supernatural overtones, but everything that happens in it can be given natural and plausible explanations. The father wishes for two hundred pounds to pay off the mortgage on the family house. It happens that the son Herbert is killed the very next day by being mangled in one of the machines at his place of employment. The proprietors offer to pay the Whites the sum of two hundred pounds in compensation for their loss and bereavement. These are strange coincidences, but Herbert might have gotten killed on that particular day because he stayed up late talking to their visitor and probably drinking more than he was accustomed to. That could make him lethargic the next day and more likely to be caught by the machinery. The fact that the company offered the father and mother the exact sum wished for could be a pure coincidence. Mr. White wished for a modest sum, and the company only wanted to pay a token amount of compensation. If Mr. White had wished for a million pounds and had somehow received it after his son's death, that would be a different story entirely.

When White's wife gets him to wish for his son to come back to life and return home, they hear a prolonged knocking at the door. The reader has been beguiled into thinking that this must be the horribly mangled Herbert White brought back in answer to the second wish. However, this could be just another coincidence. The person knocking so persistently might have been some motorist who needed assistance or directions. Mr. White uses his last wish to make the knocker go away, but that person would have to get tried of knocking anyway and leave of his own accord.

The fact that the Whites never know the truth for sure is what makes "The Monkey's Paw" so uncanny. 

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In the story 'The Monkey's Paw' the author presents a tale of the macabre, and the horror of breaking a curse. In remarking 'his horror is real, but it is a sane kind of horror' the commenter is suggesting that any normal person would be traumatised by seeing something so gruesome and something so unnatural because it speaks of powers beyond this world - perhaps even supernatural, black magic or beyond our control. He makes a distinction between this and a paranoid sort of horror or reaction - where it is the other way around and the sufferer undergoes pain and torment through fear of something that is in fact not there in real life. This underlines the author's premise that this is not just a story but did indeed happen - which leaves the reader even more affected and the story more impactful. He plays on the grey area between the two.

The short story presents a family spending a relaxing night in together around the fire. An old friend visits them - he has returned home after more than twenty years in India .He tells the family  exciting tales of his travels and offers them mummified monkey's paw, which has curse on it from a holy man where it will grant its owner three wishes. He warns them notto use it but they can't resist - and the Monkey's Paw punishes them withthe terrible effect of having a life of its own. They tempted fate and the story tells the result.

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