"Fairy tales are more than true, not because they tell us that dragons exist, but because they tell us that dragons can be beaten."

Neil Gaiman famously attributed this quote to G.K. Chesterton in the beginning of his novel Coraline

Fairy tales are more than true, not because they tell us that dragons exist, but because they tell us that dragons can be beaten

I had been unable to locate that quote in those exact words in Chesterton's works; however, it had been suggested by others that he was paraphrasing this passage from Tremendous Trifles found here

That seemed to me the most likely possibility (though I could never discount the possibility that perhaps it had been an exact quote. Chesterton had in other cases expressed ideas that were similar in content, yet still in slightly different words, on different occasions, after all. So it was always possible that was the case here, and that I had simply not found the version Gaiman was referring to- Chesterton has plenty of work that still hasn't made it online, of course, in which it might conceivably have been found.)

As it turns out, though, the speculations were correct, and Gaiman was paraphrasing Chesterton. He explains in this post here what occurred:

http://neil-gaiman.tumblr.com/post/42909304300/my-moms-a-librarian-and-planning-to-put-literary