Frances Burnett's books were some of my best childhood friends, as I was growing up during the 60's in a bleak and grey country.
Cedric Errol is a sweet little boy and everything in this story can be explained trough love: he is inclined to love everybody and everything, and his love does change his not-so-sweet grandfather. The message I got from Little Lord Fautleroy as a child was that people have to be loved before being loveable, and that love CAN change things - it's still a good lesson to be learned.
And, of course, the book gave me and my brothers a perfect private joke we still use, about "aunt's sisters".
Turn your TV of, turn the gameboys of, sit all snug on the floor, with pillows and rugs, and read it for your six/seven year olds. It's magic!