Carol Anne Etchison is a lonely ten-year-old living in her family's bustling house on Montpelier Street, where she often feels invisible among her siblings and parents despite their love. Her solitude is transformed when she discovers a magical flower in the backyard that reveals Lila, a fairy no bigger than her thumb who becomes her dearest companion and guide into a miniature world of wonder.
Through Lila's magic, Carol Anne can shrink to fairy size and enter her grandmother's old dollhouse, which becomes the "Land of Felt and Lace"-a living world populated by porcelain dolls, helpful mice, musical thimbles, and other tiny creatures. As Carol Anne grows from childhood through her teenage years and into adulthood, her relationship with this magical realm evolves, teaching her that true friendship transcends size, that love can take many forms, and that the most profound magic often lives in the smallest moments of connection and wonder.