The fairy tales become a language that Elsa understands, just like the (foreign) language she and Granny share. This book takes place on at least two planes, with the fairytale plane paralleling reality. Elsa loves Harry Potter, who lives in another fairytale world, and understands Miamas because it's become her reality. It's where she lives much of her life with Granny. She fears nothing in Miamas, because everything that's supposed to turns out well there. "Granny isn't particularly good at living in the real world," (p. 13.) and neither is Elsa. They are both fantastic at living in Miamas. Elsa is able to see after awhile that granny's stories from Miamas belong together, and eventually Elsa also learns that real life is one long story. It's just that life's "individual episodes" appear disjointed as we live them.
Elsa's mother's life wasn't easy, and granny was the main reason for that. In turn, Elsa's mother hasn't made Elisa's life easy, because her perfectionism keeps her from being able to understand Elsa. The fairy tales help Elsa understand why granny wasn't around for Elsa's mother, and the impact that had not only for Elsa's mother, but for all the other characters in the fairy tales (who are actually real). The fairy tales are easier for Elsa to understand than reality, but once she learns how to translate them, she is able to understand the world around her.