The Castle of Otranto mimics—and, in that way, parodies—the style and content of many medieval stories in a way that draws attention to their characteristic hyperbole, sensationalism, and excess. Walpole does this to particular effect with the narrative of incest in the novel, beginning with Manfred's unwelcome advances to Isabella in Chapter 1:
“I desired you once before,” said Manfred, angrily, “not to name that woman: from this hour she must be a stranger to you, as she must be to me; in short, Isabella, since I cannot give you my son, I offer you myself.” “Heavens!” cried Isabella, waking from her delusion, “what do I hear! you, my lord! you! my father-in-law! the father of Conrad! the husband of the virtuous and tender Hippolita!”—“I tell you,” said Manfred, imperiously, “Hippolita is no longer my wife; I divorce her from this hour. Too long has she cursed me by her unfruitfulness.
This is so over-the-top and overwrought it seems silly, as do many of the other instances of these tropes of chivalry and courtly love. Manfred makes the decision to take Isabella as his wife very quickly, and his behavior seems especially egregious because of how rapidly he turns on his loyal spouse, saying he will "divorce her from this hour." The way that Walpole explains Manfred's reasoning for marrying Isabella and divorcing Hippolita only further confirms that this is an attempt at parody. His marriage to Hippolita is, after all, already "incestuous" in medieval terms, as she was previously his sister-in-law. Divorcing her to marry Isabella is just replacing one form of incest with another.
As Isabella is not actually Manfred's biological daughter, marrying her isn't technically incest, and his marriage to Hippolita wasn't biologically incestuous either. The problem is a social one: his position as Isabella's father figure makes it a violation of conventional morality in both Walpole's time of writing and in the medieval period. This desire for incestuous marriage is another example of the multifarious badness of this antagonist. Manfred is evil in so many ways that his character itself becomes ludicrous.
All the incest is also an allusion to the Shakesperian tragedy Hamlet, another tale of princely suffering plagued by suggestions of forbidden desires. Walpole was explicitly inspired by Hamlet to write this novel, and he cites Shakespeare's play as being important to this novel in the Preface to the Second Edition. Hamlet also contains a marriage between siblings-in-law: that is, between Gertrude (Hamlet's mother) and Claudius (his uncle). As in Walpole's novel, this one instance of incest seems to beget another. Hamlet's frustrated and repressed desire for both his own mother, Gertrude, and his potential bride, Ophelia, significantly impact his characterization and the plot. In the same way, Manfred's own desires for unsuitable women and everyone else's responses to them create much of the drama in The Castle of Otranto.
