Published in two parts in 1605 and 1615, Don Quixote appeared at a time when the printing press (which appeared around 1500) had made reading materials much more common than they'd ever been in Europe. Many more people had access to books, and as a result, many more people had learned to read and write. Don Quixote is in some ways a meditation on what it means to live in a world where so many more stories are accessible via reading.
Reading plays several roles in the text. At various times, the characters become both readers and storytellers. The story itself is presented with a narrator who speaks as if knowing a reader is watching the whole thing unfold.
Don Quixote focuses on the adventures of Alonso Quijana, an avid reader who becomes convinced that his real purpose in life is to become a knight errant. His first campaign as a knight, however, ends so badly that his close friends decide they need to figure out why he's developed these crazy ideas about being a knight.
Chapter 6 begins with the line "He was still sleeping; so the curate asked the niece for the keys of the room where the books, the authors of all the mischief, were, and right willingly she gave them." Here, the books aren't just passive objects to be read; they're also authors of Don Quixote's actions. Don Quixote's reading is also writing his own story (which we are now reading).
Upon examining the books, Don Quixote's friends decide that most of them are dangerous, so they decide to burn them. In chapter 7, the narrator notes:
That night the housekeeper burned to ashes all the books that were in the yard and in the whole house; and some must have been consumed that deserved preservation in everlasting archives, but their fate and the laziness of the examiner did not permit it, and so in them was verified the proverb that the innocent suffer for the guilty.
One point to note in this passage is that it's not the burning of the books itself that the narrator criticizes. Rather, it's "the laziness of the examiner." In other words, the narrator appears more critical of lazy readers than of the destruction of books.
After they burn the books, Don Quixote's friends then wall up the door of his library, hoping that he'll just forget it ever existed. He doesn't, of course.
When he asks his niece and housekeeper where his library went, they make up stories. His housekeeper claims the devil carried the books away, while his niece claims it was a magician who floated in on a cloud.
Here, we see two characters who, having disposed of Don Quixote's books, are forced to turn into authors themselves, crafting a story to replace the stories they destroyed. They burned the books because they feared that reading had destroyed Don Quixote's mind. But having taken away his ability to read fantasies, they find themselves generating exactly the same kinds of stories they tried to deprive Don Quixote of in the first place!
The stories about where the books went are necessary in part because of the way reading and imagination are linked in the text. Don Quixote's friends blame reading for pushing him into a part of his mind where he acts out the contents of his imagination.
Yet, that connection isn't located only in Don Quixote's mind. He pulls many of his friends into it as well. Some of them, like his neighbor Sancho Panza, start seeing themselves as part of the same story, even though they never read Don Quixote's books—they're pulled in solely through the power of Don Quixote's reading-fueled imagination.
Ultimately, Don Quixote's reading entangles him in questions of fate and destiny as well. Through reading, Don Quixote becomes dissatisfied with his quiet life as a country squire. He wants to become more. He wants to right the wrongs of the world and do great deeds. Much of the plot features his attempts to do so. While some of them are humorous, the larger message appears to be that reading has a powerful effect on who we think we are—and on the ways in which we use that understanding to change the world around us.