Whatever stories are made of, words aren’t fundamental to it. Something else is. And what I think is fundamental to the narrative process is events — stories are made of events….Whether we read it in a children’s book or hear it being told to us in a class, it doesn’t matter. It’s the story itself, the events themselves that have that power to affect us.
From a truly wonderful interview by James Mustich with Philip Pullman (and one he especially recommends).