This story is very similar to a fairy tale because an outside force sweeps in and changes the character’s life.
In some ways, Pip’s story is a Cinderella story. Cinderella was abused and forced to stay out of normal life and society. Pip was also abused and secluded. Cinderella received supernatural intervention in the form of a Fairy Godmother. Pip also received intervention, although there was nothing supernatural about it. Consider it fate.
Cinderella’s Fairy Godmother transformed her into a princess worthy of marrying her prince. In a way, Magwitch did the same thing with Pip. He was impressed with Pip’s generosity to him when he was an escaped convict. He also wanted to prove that anyone could be a gentleman. Pip was whisked away to London to be trained for high society. Like Cinderella, this involved new clothes. I guess the clothes really do make the man!
Just as Cinderella’s fairy godmother prepared her to meet her prince, Pip’s fairy godfather prepared him for his princess. Pip assumed that he was being groomed to marry Estella. Of course, what really happened is that Estella had no interest in him, and Miss Havisham was not his benefactor.
Even Pip compares his and Estella’s story to a fairy tale.
She had adopted Estella, she had as good as adopted me, and it could not fail to be her intention to bring us together. She reserved it for me to restore the desolate house, admit the sunshine into the dark rooms, set the clocks a going and the cold hearths a blazing, tear down the cobwebs, destroy the vermin—in short, do all the shining deeds of the young Knight of romance, and marry the Princess. (Ch. 29)
In this fairy tale, there is no happy ending. Estella and Pip are unhappy, and will remain unhappy. Neither of them knows how to love in the normal sense. Pip is obsessed with Estella, and Estella is irrevocably broken. Pip was transformed by his fairy godfather, but his princess was not ready to marry him.
The importance of the fairy tale for this story is that Dickens is telling us that you can't transform yourself for the one you love. It is a rather pessimistic love story that Pip and Estella share. The people who are in love in the normal, simple way are much happier. Joe and Biddy, Herbert and Clara, and Wemmick and Miss Skiffins all live happily ever after, but Pip and Estella will be forever mourning the lives they could have had.
Great Expectations utilizes many adaptations of fairy tale archetypes: an innocent child (Pip, when we first meet him); a monstrous ogre (of sorts) who threatens to eat him (Magwitch, when we first meet him); a witch type who casts spells over people (Miss Havisham); and even an evil stepmother, although in this case, that role is played by Pip's sister.
Also, as in some fairy tales, there is an act of kindness that has many unexpected consequences. Pip undergoes a sort of Cinderella-like transformation, but unlike Cinderella, who retains her essential compassionate nature, Pip has to learn what is really valuable in life through the plot's twists and unexpected reveals.
In the end, however, Dickens does fall prey to what I think is his one fault as a novelist: a tendency to sentimentality. It's highly unlikely that Estella, raised as she is to be totally unfeeling, would undergo the transformation Dickens gives her so that she can return Pip's love. That is, perhaps, a real "fairy tale ending."