The castle plays an important role in establishing the Isabella, double to Matilda, flees Manfred by running down in to the castles cavernous, catacomb-like, dungeons. It is of note that when Theodore is telling Manfred what happened when he helped Isabella escape he phrases it in such a way that it seems as though she was running from the castle itself, rather than Manfred. He explains to Manfred: 

The scene of Isabella making her way through the darkened tunnels (the candles have all conveniently gone out) has little success in evoking fright (much less terror or horror) in a contemporary audience, but it is one of the few scenes in the novel that succeed in being suspenseful, even through the rushed and chaotic lens the story is told through, this effect is most likely why it has become one of the most iconic images of the classic Gothic novel. The castle also, in its physical manifestations, mirrors the happenings around it, most prominently at the climactic scene of the novel, when it is revealed that Theodore is the true heir:

The walls of the castle do not merely crumble, they are "thrown down with a mighty force," giving a greater presence to the castle than a mere building. The castle itself acts as the revealer of Alfonso (or, more accurately, his suit of armor that the castle has housed for years), who has quite literally "grown too large" to remain within the castle. The castle's size and its near personified demeanor (part of the atmosphere of gloom and foreboding Walpole attempts to create) give it a lasting position at the center of most (if not, when counting metaphorical 'castles,' all) subsequent Gothic stories and novels. The Castle itself is very firmly a part of the ancient gothic that Walpole uses to justify the excess and indirectly show his dissatisfaction with the present and longing for the romanticized past. The castle, being part of the ancient, is thus powerful and influential in the course of the story, representing the dark subconscious mind (the catacombs), the powerful terror that the Gothic author hopes to evoke, and the supposed strength of the "old" aspects of society. It is a part of the contradictory nature of the literary Gothic that the castle has remained so iconic; the castle itself has only become more ancient.
	One of the aspects of the Gothic novel said to be from the "modern," the style of the text, is not wholly of the "new." While the novel format had allowed a very different type of story, Walpole's style in and of itself is directly related to the theatrical. Plays were performed long before the concept of the novel came into play and the overly theatrical style, almost a signature of Gothic, is rooted firmly in the past. Walpole himself admits, when pretending to have translated The Castle of Otranto that the author's "talents … were evidently proper for … the theatre" (7). 