The picture illustrates a moment in Milton’s poem where he compares the fallen angels in the Hall of Pandemonium in Hell to the fairies who bewitch a passing peasant with the sound of their music and dancing:
Whose midnight revels by a forest side
Or fountain some belated peasant sees,
Or dreams he sees, while over head the moon
Sits arbitress, and nearer to the earth
Wheels her pale course, they on their mirth and dance
Intent, with jocund music charm his ear;
At once with joy and fear his heart rebounds.
Instead of depicting the fairies as they appear in traditional woodcuts, dancing in a magic circle on the ground, Fuseli shows them linking arms and swirling, as in a dream or vision, above the sleeping shepherd. Emerging from the darkness they form a vortex of light above his head, which one fairy touches with a dream-inducing wand. Fuseli draws on his imagination for the supernatural creatures that populate the picture. In the bottom left-hand corner a crouching witch has just pulled a flower-headed mandrake out of the ground. In the opposite corner, seated on large stone steps, is Queen Mabs, the bringer of nightmares. Attached to her by a chain is a monster child, the demonic incubus, who points at the sleeping man. Farther up the steps behind them, a naked fairy combing her hair derives from Shropshire folklore. According to legend, these naked creatures entice unsuspecting travellers, overpower them and steal all their clothes. The building on the right possibly represents the Temple of Diana, since according to Medieval folklore Diana was transformed into a demon and led an army of witches through the sky by night. Alternatively, Fuseli may have intended it to represent the ivory portal, described by Homer and Virgil, through which delusive dreams emerge.