The Water Babies was probably one of my favourite books as a child, I remember rereading it all the time. I read it to my own children when they were quite young and they loved it too. Of course, it was written in the 19th century when practices such as sending little boys up chimneys would be hard to get a modern day western child's head around, but life was harsh then for the poor and still is in many countries.
I, like many of my generation was a great fan of Enid Blyton read most of her stuff. I think I did pick up on the fact that the baddies in some of "The Adventure" and maybe" Famous Five" series were alluded to as "dark swarthy foreigners" subliminally I think it reinforced the notion that half my family were dark swarthy foreigners, but was I bothered? I don't think so.
My children loved Roald Dahl, didn't really latch on to Enid Blyton, she was of her time of course, as most authors are. RD did have a cruel streak at times, albeit very funny. My granddaughter likes David Wallams but his books are nothing like as clever as RD's imo.