An explanation of the dream?

The belief that Squire is living in a dream is reinforced by the mythical creatures that he meets throughout the quest - creatures that are drawn from the mythology of different cultures. Apart from the main characters, the Luchorpans, that are a variant of the Irish Leprechauns, he also meets the Minotaur Homar, from Greek mythology, Phynnodderee from the Isle of Man and the Ballybogs from Ireland (to name a few). In the second book 'Faith', he meets other creatures from Irish and Greek mythology, as well as one from the Himalayas. A logical explanation would be that Grant Cowie (Squire's alta ego from our world) has knowledge of various mythologies, and Squire dreams about them so that they become part of the 'reality' of his life in the Land.

However, the logical explanation is not always the right one. You will need to read to the end of the third book 'Love' before the whole plot is revealed.