O, to be sure, we laugh less and play less and wear uncomfortable disguises like adults, but beneath the costume is the child we always are, whose needs are simple, whose daily life is still best described by fairy tales.

This quote is saying that even though adults act differently than children, they are still the same inside. Adults may have to conform to society more, so they laugh less and play less than children, and they wear disguises in the form of adult behavior. But underneath all of that, adults have the same needs as children and life’s most important lessons are still the same as the lessons taught in fairy tales.