An ambitious elaboration of the Danish legend echoed in Matthew Arnold's ""The Forsaken Merman,"" here lavishly extended with history and other scaffoldings. Fleeing the ruined Jutish met-kingdom of Liri, the tribe of King Vanimen find their way to the coast of Dalmatia, already peopled with its own ""uncanny beings."" Meanwhile the king's half-human son and daughter, exploring westward in search of treasure and their lost people, encounter marvels ranging from the Great Selkie of Sule Skerry to the Inuit of Greenland. The leitmotiv of the narrative is the inevitable decline of ""Faerie"" as the Christian West swallows up the ways of the elder ""halfworld."" For sheer, imaginative sweep, this is surely one of Anderson's most remarkable books, though the writing often strays into purple commonplace and leaden sentimentality.