Lud-in-the-Mist is, at this point, nearly 100 years old. It remains available and occasionally spoken of in large part because of Neil Gaiman, himself a noted author of fantasy. Gaiman gave the book a good solid push in a short article for Fantasy & Science Fiction in 1999. I have a lot of respect for Gaiman, and so I finally read the book.
It is, indeed, an extraordinary piece of work - quite unlike other fantasy. It's unusual in structure and tone, and she didn't really have any previous fantasy to model her work on. The writing is lyrical, articulate, and challenging - both because you need to pay attention and because you'll probably need to spend a LOT of time looking up the words she uses. I spent more time with my dictionary over this one book than over the previous twenty I've read (I've included a partial list of words I had to look up below). I have a reasonably large vocabulary, and I can excuse part of this as a number of these words falling out of use in the last 90 years. The rest though ... she just likes her words.
The story is set in the country of Dorimare, a very practical place a little too close to the country of Fairy. Nathaniel Chanticleer is the Mayor of the main town, Lud-in-the-Mist. He must deal with the smuggling of fairy fruit - an unmentionable item that will turn the most prosaic person into a fanciful creature full of strange longings. The story meanders through an odd sequence of events that in hindsight wouldn't sound much like a modern fantasy story if I described them, but the writing is - as previously mentioned - wonderful, and will carry you along beautifully.
One of the outliers of the fantasy genre that all fans of fantasy should read. Reminds me considerably of Robert Holdstock's Mythago Wood, in that they're both extraordinary works outside the common fantasy tropes - but Mirrlees is a far better writer than Holdstock.
A partial list of words I didn't know: pleached, patibulary, negus, catechumen, herm, purblind (I should have known that), cicerone, raree-show, sillabub, frangipane, cheapjack, perorations, pattens, sumpter.