The Nutcracker, the famous Christmas ballet, was based off a story written by E. T. A. Hoffmann in the fall of 1816 (to put that in the context of the fairy tale world, the Grimms published the first edition of their Children and Household Tales in 1812). Note that the ballet story is not directly derived from this story, but from Alexandre Dumas' translation and adaptation of the Hoffmann story.
Hoffmann did not consider himself primarily a writer, but a musician. According to E.F. Bleiler, Hoffmann was a very underrated but significant figure in music: he was revered as a music critic, where he wrote under the pseudonym Kreisler. He wrote "the first really romantic music," was one of the first to recognize the merits of J.S. Bach, one of the first to support Beethoven intelligently, inspired the compositions of giants such as Weber, Schumann, and Wagner, and may have been the first to write an opera based on folklore. This would be his opera Undine, based on the tale of the water nymph who dies for love of a human. Much of the music from this was destroyed in a fire.
Critics say his music was not great like his writing-it "sounded like Mozart...but without Mozart's genius." He tried to make a living off music but turned to writing when that didn't work out.
His Nutcracker story was not the only one to be turned into a ballet plot-Delibes' Coppelia is taken from his "The Sand-Man." The story "Nutcracker and the King of Mice" came out of the idea that "a child is closer to the primal innocence...than an adult, and can enter and savor realms of experience or beyond-experience that even an adult with insight cannot enter." The main characters were based off of real people-Godpapa Drosselmeier was based on himself. The Stahlbaum children were representative of his friend Hitzig's children, whom he had made a cardboard castle for the previous year, as Drosselmeier presents a castle to the children in the story.
"In 'Nutcracker and the King of Mice' a marchen or literary fairy tale serves as the 'unconsious focus' of the story. It indicates the inner relationships in the ideal world that created the present story situation, together with possibilities for future resolution."