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Never one to be caught in an understatement, the journalist G. K. Chesterton wrote in 1905, "If we test the matter by strict originality of outlook, George MacDonald was one of the three or four greatest men of 19th century Britain." Whether later historians agree or disagree with Chesterton's assessment, MacDonald undeniably attracted a wide range of admirers in his own time. Queen Victoria gave MacDonald's novels to her grandchildren and granted him a Civil Pension in 1877. Archbishop Tait said that MacDonald "was the very best preacher he had ever heard."

Chesterton chaired the planning committee of the "George MacDonald Centenary Celebration," held on December 10, 1924, one hundred years after MacDonald's birth. The committee also included Sir James Barrie (author of Peter Pan), the poet William Butler Yeats, Ernst Rhys (founder of Everyman Books), and other well-known authors, theologians, social reformers, biblical scholars, ministers, a Member of Parliament, and leading luminaries of the day.

George MacDonald was much sought after both to preach and to give lectures on literature. Archived letters reveal that, due to reasons of health and fatigue, he frequently had to turn down requests for both. When he did give a sermon, he refused any sort of remuneration. He was actually offered the considerable sum of $20,000 per year to pastor a Fifth Avenue church in New York but was not tempted. He lectured in England, Scotland, Ireland, America, Canada, and Italy to audiences sometimes numbering in the thousands. He often spoke on Shakespeare—upon one occasion proffering the topic choice: "'The Moral Drift of Shakespeare's Play of MacBeth'—or for MacBeth, substitute Hamlet or King Lear." Other subjects included Wordsworth, Chaucer, Shelley, Tennyson, Milton, Dante, and his own essay on the imagination. In the U. S., Robert Burns was a popular topic, with audiences delighting in MacDonald's Scottish brogue (though some upper-class English listeners labeled MacDonald's accent and manner as "poor elocution").

MacDonald had a profound influence on the circle of 20th-century British writers known as the "Inklings." J. R. R. Tolkien's essay "On Fairy Stories" and C. S. Lewis's essay "On Stories" are both deeply indebted to MacDonald's writings on the relationship between faith and imagination (as is the chapter "The Ethics of Elfland" in G. K. Chesterton's Orthodoxy). Charles Williams, in his book Victorian Narrative Verse, included MacDonald among the 15 select poets. Tolkien and Lewis (and their student W. H. Auden) discussed MacDonald as the great "mythopoeic" writer—one who creates enduring stories greater than their medium, stories that can transform the reader. Indeed, when Lewis's character Jane (That Hideous Strength) needs to recover in bed, she is handed MacDonald's children's book The Princess and the Goblin to help the healing process.

Perhaps Lewis's greatest accolade to MacDonald was having him appear as his guide in The Great Divorce (like Virgil for Dante). Tolkien was more ambivalent, sometimes giving MacDonald high praise, sometimes withdrawing it completely. But if imitation is flattery, the correlations are many and strong—even the subtitle of The Hobbit echoes one of MacDonald's titles, There and Back. Lewis described Tolkien excitedly to his friend Arthur Greeves as "the one man absolutely fitted, if fate had allowed, to be a third in our friendship in the old days, for he also grew up on William Morris and George MacDonald … "

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