Otogi Zoshi is definitely one of my favourite animes.
The story centres around Hikaru, an aristocratic girl, who masquerades as her brother and finds herself drawn into the complex political stuggles taking place around her. It's set in the Heian period, so it's a time when traditional values of honour and responsibility dominate. The plot begins as an adventure style story, as Hikaru and her companions are sent to search for the `magatama', magical stones that are believed to have the power to save the Capital.
Don't let that put you off though! The story isn't drawn out at all- the plot is fast moving and remains interesting throughout. The characters are also very well developed, Hikaru, as well as the supporting characters around her. Finally the artwork and character designs are really beautiful.
Overall, Otogi Zoshi is quite a short series (it has 6 volumes in total). In case anyone is confused let me just explain: there are two story arcs containing 13 episodes each (making a total of 26 episodes). The first half of episodes make up the Heian arc and then comes the Tokyo arc. The arcs are related but self contained- I don't want to give away anything else about the plot, but on the whole, the series is well thought out and really has a lot of depth.
I really love and definitely recommend this anime!