Fans of The Borrowers or Sylvia Cassedy's Behind the Attic Wall have cause to celebrate this first novel about a family of lifesize rag dolls who reside modestly in an English neighborhood. From the first chapter -- a letter that throws the unorthodox Mennyms into panic -- Waugh constructs their world with near-flawless mastery. Singular characters with names like Appleby (a perpetually cheeky 15-year-old) or Nuova Pilbeam (twin sister of the ""only blue Mennym"") are deftly and unforgettably delineated. The Mennyms manage their affairs discreetly, earning wages (patriarch Sir Magnus writes articles while his wife Tulip knits sweaters for the fashionably elite) and keeping up the pretense of being ""real"" (though they never age) for 40 years, until Albert Pond of Australia writes to say that he's inherited their ample Victorian home and intends to visit. ""'If he ever finds out what we really are,' ""groaned Granpa,"" 'I shudder to think what he might do.' ""The plot twists and turns around the issue of Albert -- and the issue of what is real and what make-believe, yet still precious. There's plenty of material here for a sequel, a hope readers will surely embrace.