The external setting of this work consisted of 3 element: time, place and social environment. In 2006, the movie was filmed in a Scots Pine forest situated in the Guadarrama mountain range, Central Spain by the talented Mexican director Guillermo del Toro.
The idea for Pan's Labyrinth came from Guillermo del Toro's notebooks, which he says are filled with "doodles, ideas, drawings and plot bits" which had been kept for twenty years. There are a lot of social factors affecting Del Toro. Firstly, his mind and work are characterised by a strong connection to fairy tales and horror, also he described his political position as "a little too liberal”. Del Toro got the idea of the mythological faun (Pan) from childhood experiences with "lucid dreaming": after he waked up, a faun would gradually step out from behind the grandfather's clock. The faun became a mysterious, semi-suspicious relic who gave both the impression of trustworthiness and many signs that warn someone to never confide in him at all. Moreover, by exploring the figure of the god Pan and the symbol of the labyrinth, he tried to “mix those compelling factors and play with them”.
Secondly, “Pan's Labyrinth” continues a tide of fine movies of Del Toro, illustrating a period after Francisco Franco has come into power. He pointed out that the villains in most of his films are united by the common attribute of authoritarianism. Most people make the villains ugly and nasty but Del Toro realizes that one of the dangers of fascism is that it's very attractive. To him, perfection actually lies in fully loving the defect. Killing somebody can be because of he broke a law, or