Setting: In a place here daydreaming is prohibited and in an age when the legal system is strict.
Conflict: a boy is in conflict with society.
Climax: he set a mermaid free, which means he ceased to imagine.
Symbols: the mermaid is a symbol of freedom of fancy.
Irony: imagination is a behavior to free to do but that it is prohibited by law is ironical.
Theme: the law has to be powerful but mustn't be one which deprives human being of freedom.