(From the Museum of Science and Industry Chicago site):
Silent film star Colleen Moore was always fascinated by dolls and doll houses. She owned several elaborate doll houses as a child, but later in life her father, Charles Morrison, suggested that she should pursue her passion for miniatures and doll houses by creating the "doll house" of her dreams. Her position as one of the most popular actresses in Hollywood gave her the resources to produce a miniature home of fantastic proportions. Beginning in 1928, Moore enlisted the help of many talented professionals to help her realize her vision.
Horace Jackson, an architect and set designer who worked for First National Studios, created the floor plan and layout of the castle with the basic idea that “the architecture must have no sense of reality. We must invent a structure that is everybody's conception of an enchanted castle."
Moore also enlisted the help of art director and interior designer Harold Grieve. Grieve had designed the interiors for Moore's actual mansion, so he was a natural to create the interiors of her fantasy castle.
By 1935, approximately 100 people worked on the Fairy Castle. The price tag for this 8'7" x 8'2" x 7'7" foot palace, containing more than 1,500 miniatures, was nearly $500,000."
And about the castle's Library:
The library is done in a sea motif. Over the fireplace stands Captain Kidd with his treasure behind him. The door to the right shows Robinson Crusoe and his man Friday. Above the other door is Gulliver, pulling the Lilliputian ships through the gates of the city. The furniture has a sea motif and is verdigris copper. Sea horses and sea snails hold the shell-like furniture. This furniture is made for fairy folk who like to read in different positions. That chair turned up in front is made for a little elf who likes to read with his feet in the air. The books in the library are all real. There are more than 100; many of them are handwritten by some very prominent authors.
On the reading stand is a dictionary. This was given to Colleen Moore by her father when she was only 5 years old, and it began her whole miniature collection.
Read more here and enjoy the gallery (and of course, purchase the book):