Lucy greets the faun, and he asks her if she is a "Daughter of Eve", a "girl", or a "human". Confused, she says she is "Lucy", but confirms that she is human. The faun introduces himself as Mr. Tumnus, and explains that Lucy has stumbled into Narnia, the land that stretches between the lamp-post and the castle of Cair Paravel on the Eastern Sea. Lucy notes that it is summer where she is from, and Mr. Tumnus sighs, telling Lucy that it has been winter in Narnia for a long while. He invites her to his home for food and cake, and though she is hesitant at first, she follows him over the little hills into a valley, where he lives in a cozy cave.
By the time Lucy settles in the cave, she feels as if she has known Mr. Tumnus for a long time. Mr. Tumnus presents two little chairs: "one for me and one for a friend," he says. Lucy notices the books on the shelf, and enjoys the delicious tea. They share sardines on toast and cake, and Mr. Tumnus tells her stories of the forest, of Nymphs, Dryads, and Fauns, as well as the milk-white Stag who offers wishes if you catch him. The merry stories, however, belong to summertime in Narnia, and Mr. Tumnus sighs, since it is always winter now. He plays his flute, and Lucy begins to feel drowsy.
Suddenly, Lucy realizes that she has been gone for hours and hours, and exclaims that she must go. Mr. Tumnus begins to cry, only sobbing harder when she comforts him by giving him her handkerchief. He tells her that he is a bad faun, and Lucy counters by saying that he is good, and is in fact the nicest faun she has ever met. He confesses, however, that he is in the service of the White Witch, the one who has made it always winter in Narnia, yet never Christmas. He has been ordered to kidnap any Sons of Adam or Daughters of Eve that happen upon his path, and Lucy insists that he will do no such thing. He cries that he has already done it, that she is the child, and that he has lured her to his cave, pretending to be her friend, only to kidnap her and take her to the White Witch. The punishment for not following her orders is harsh: he will be turned into a statue at her house until the day that the four thrones of Cair Paravel are filled.
In the end, Mr. Tumnus chooses to defy the White Witch by leading Lucy back through the wood. He says that they have to be careful: even some of the trees are her spies. When they reach the lamp-post, Lucy sees the wardrobe door. Mr. Tumnus asks to keep her handkerchief, and she agrees, fleeing for the door, and reentering the wardrobe. She finds herself back in the empty room, and calls out to the others, who she can hear in the passageway, and yells, "I've come back, I'm all right."
Lucy's encounter with the faun confirms three things about Lucy's identity in Narnia. She is: (1) a girl; (2) a Daughter of Eve; and (3) a human. These three facts cleverly allude to three different ways of reading the story. The story is a children's story about "a girl", but can also be read as a tale about the Christian faith. Lucy can therefore also be viewed as "a Daughter of Eve", a clear reference to the Genesis story of how God created Adam and Eve. Lucy is, however, also a "human", which hints that the story of Narnia can be read as a human story; a universal coming-of-age lesson.
Lewis himself never indicates a preference for how the story ought to be read; his concern lay more with the breadth of his audience, as well as his desire to fill their hearts with the power of his story. Just as a line of poetry may strike at the chord of an emotion, a good story reveals an essential fact about life itself.
Lucy, having confirmed the three possible identities, follows Mr. Tumnus deeper into the wood, to his home. There, they strike up a friendship as they share food and Mr. Tumnus educates Lucy about the forest. Friendship and food are continually linked through the course of the narrative. The encounter between Mr. Tumnus and Lucy is the first instance of shared revelry in Narnia, though it is important to note that it was, at least at first, a ruse. However, Lucy's belief that Mr. Tumnus is a "good faun" (reinforcing her tendency to believe in the inherent goodness of people) fills Mr. Tumnus with a desire to prove himself. "Belief", it seems, has the power to impact reality.
Mr. Tumnus, in an almost romantic display of chivalry, chooses to defy the orders of the White Witch, and seals his friendship with Lucy. In this manner, Lucy becomes knit into the fate of Narnia. The question, however, lingers: will the White Witch discover Mr. Tumnus's betrayal and punish him? The gift of Lucy's handkerchief serves a token symbol of friendship, foreshadowing its later role in the narrative.
Lucy also learns from Mr. Tumnus that the White Witch is the cause of the perpetual winter in Narnia. The fact that it is never allowed to become Christmas plays on a child's natural delight in the holiday, and reveals the constant suffering of the forest creatures, who are never given a cause to celebrate. In Narnia, the normal cycle of the seasons has been halted. Additionally, the allusion to the prophecy that the White Witch's spell will be broken when the four thrones at Cair Paravel are filled foreshadows the arrival of the four children in Narnia, and creates anticipation for what is to come.