Princess Mononoke is considered an animated historical fantasy epic.
Historical fantasy stories are your usual fantasy story that grounded in a world inspired and supported by real historical cultures and eras. Nowadays , European Medieval is the most popular setting for historical fantasies (Lord of the Rings being a large example, whereas Game of Thrones takes in loads of backgrounds) and all seem to fall under the same world-building conventions. In this case, Princess Mononoke sets itself in a hybrid era of the Muromachi era (where Japan split and the rise of Samurai) and the era of using gunpowder and its implementation into infantry firearms (which wasn't a thing until mid-17th century). Both are huge world-building elements in this regard and despite the chronological intertwining of the elements, they come together nicely. The film's fantasy elements are more understated yet feel more inspired than average fantasy stories. In this world, animals can express themselves through booming baritone voices that aren't really spoken through their mouths (eg. Narnia) but rather 'emitted'. Animals can grow to ridiculous sizes and are then considered gods. Gods are not only larger but are usually give off some auroa to add to the whole supernatural element. Other fantasy elements include the 'corruption', a disease akin to 'The Thing' where it takes over a host whether it be a landscape or monster and renders it a 'demon.' Also spirits play a huge role in the film and it's themes revolving around nature.
In terms of film, Epics are considered a telling of a traditional story of grandeur / heroism that takes place over an ambitious running time. Fantasy epics are considerd also to contain three elements: It must be a trilogy or a very long standalone story, its story must encompasses the span of a fear years, and it must contain a large-backstory or world in which the story takes place. Other examples of other epics that aren't limited to fantasy settings include:
Das Boot, Apocalypse Now, Gladiator, Barry Lyndon, Lawrence of Arabia, Avatar.
In the 1970s, way before Studio Ghibli was conceived (or Valley of the Wind) for that matter), Miyazaki had sketched some concepts about a princess who lived with a beast in the forest. It wouldn’t be until 1994 that he’d pick up the concept again and write a plot-line and draw the initial storyboards for what would become Princess Mononoke. Around the same period, Masashi Ando (the supervising animator) and Miyazaki took a trip to the Yakushima ancient forests and the Shirakami-Sanchi mountains. For this trip. they had brought a bulk of the art directors, background artists and digital animators for three days. The film was allowed a budget of 2.35 billion yen (25 million dollars). Over 144,000 cels were used for the film, and Miyazaki had apparently had made adjustments to 80,000 of them. The final storyboards (of the film’s plot itself) weren’t conceived until months before the film’s premiere date.
The plot follows a prince (Ashitaka) who’s arm is infected after fending off a demon that invades his village. It’s revealed that demons in this world are Animal Gods (oversized animals like Wolves, Boars etc) that are taken over by a maggot-like corruption that comes from an iron ball lodged inside the boy.
In search of a cure, Ashitaka comes across a monk that informs him that it’d be worth it to find the Forest Spirit, a huge-stag like creature by day and a humanoid like colossus at night. During a storm at night, a convoy of men and Oxen led by a female military leader are attacked by the Wolf Goddess Moro (indicated by having two tales and being extremely huge) and her rider, San.
