The Enchanted Castle includes a range of minor characters in addition to the main roles of the four youthful protagonists. The French governess, who befriends the children during their lonely holiday at the school, emerges as a romantic heroine when her seemingly hopeless love for an aristocrat is revealed. She is a charming character, whose English, rendered as literal French, adds a humorous element to the narrative. Thanks to the children, her romantic story concludes happily. Another minor character, the cockney policeman Johnson, is puzzled by the children's antics but ultimately appreciates their help in solving a burglary.

The four protagonists—Gerald, Jimmy, Kathleen, and Mabel—are distinctly characterized. Gerald, the oldest boy, stands out as a natural leader with a tendency to refer to himself in the third person. His younger brother Jimmy and his sister Kathleen occasionally find his "And then our hero..." recitations annoying. Gerald is also diplomatic, adept at persuading adults, and a clever detective and problem solver. He possesses a poetic soul and a mischievous gleam in his eye, but insists on fairness, even to burglars. His adventurous imagination propels much of the story's action.

Jimmy, the younger brother, is the realist, often skeptical of Gerald's wild schemes. In one magical episode, he transforms into a middle-aged, wealthy businessman, a role that seems plausible for his future. Kathleen, their sister, is kind and sensible. Unlike Gerald, she tends to accept things at face value, overlooking deeper magic or mystery. Fiercely loyal to her brothers, she is a practical asset in emergencies. Known as "Cathy" by her family, she is an honest girl who quickly befriends the "princess." Mabel, the housekeeper's niece who pretends to be an enchanted sleeping beauty, is highly imaginative, making her a fitting counterpart to the self-styled "hero" Gerald.

Mabel is the first to wear the ring that makes her invisible and the first to discover its ability to grant any wish, albeit for a limited time.

The central theme of the book is enchantment—the hidden magic in everyday life for those open to it and not hardened by greed or selfishness. The four young people actively seek out magic and find it, but it also touches the French governess in her unfulfilled love, the deserving police constable, and the housekeeper's niece who longs for love and companionship. Closely related is the theme of the dream. Some episodes have a dreamlike quality, and Nesbit playfully suggests at the end that perhaps it was all a dream. Yet, some dreams do come true.