Ofelia lives in a harsh reality torn between war and her family.
The opening scene of the movie shows Ofelia dying. It's actually what happens at the end of the movie.
Ofelia was visited by a fantastic creature out of a fairytale. The creature gave her three tests that she had to go through.
Del Toro admitted to having left the movie open for viewer interpretation on purpose.
There are two ways to think of it. Some people believe that Ofelia actually could see through in another fantastic realm while others thought that she was only escaping her harsh reality.
Vidal was a fascist who cares too much for the details that he doesn't understand the value of life any longer. This could be the reason why he couldn't see what Ofelia could see. It's also the reason he cares too much for the watch his father gave him.
Ofelia dies at the end of the movie. However, depending on how the viewer explains the fantasy, she could be in some sort of a heaven where she has done all the good deeds she could or she could have been in the fantasy realm which she opened for herself.
The death of Vidal is very iconic because there would be no memory of him in the new world. The rebels refused to give his son his watch to erase his memory entirely.
Ofelia is a presentation of the rebels who die in great numbers to serve a greater good. The greater good is presented in her infant brother, Vidal's son. Vidal on the other hand presents the regime who is strong and powerful, yet would vanish and wouldn't be mentioned in history.