Recall that the story focuses on one Holger Carlson, an American-trained engineer and fighter for the underground in Denmark in WWII. In 1943 he is trapped and apparently shot by German forces, after which he wakes up in a "Carolingian" world, which he at turns theorizes may be Earth's past history, or a work of literature, or a parallel universe. As he interacts with various characters in the fantasy world, his understanding becomes clearer:
Holger got the idea that a perpetual struggle went on between primeval forces of Law and Chaos. No, not forces exactly. Modes of existence? A terrestrial reflection of the spiritual conflict between heaven and hell? In any case, humans were the chief agents on earth of Law, though most of them were so only unconsciously and some, witches and warlocks and evildoers, had sold out to Chaos. A few nonhuman beings also stood for Law. Ranged against them was almost the whole Middle World, which seemed to include realms like Faerie, Trollheim, and the Giants -- an actual creation of Chaos. Wars among men, such as the long-drawn struggle between the Saracens and the Holy Empire, aided Chaos; under Law all men would live in peace and order and that liberty which only Law could give meaning. But this was so alien to the Middle Worlders that they were forever working to prevent it and to extend their own shadowy dominion. [p. 32]And later:
This business of Chaos versus Law, for example, turned out to be more than religious dogma. It was a practical fact of existence, here. He was reminded of the second law of thermodynamics, the tendency of the physical universe toward disorder and level entropy. Perhaps here, that tendency found a more... animistic... expression. Or, wait a minute, didn't it in his own world too? What had he been fighting when he fought the Nazis but a resurgence of archaic horrors that civilized men had once believed were safely dead?
In this universe the wild folk of the Middle World might be trying to break down a corresponding painfully established order; to restore some primeval state where anything could happen. Decent humanity would, on the other hand, always want to strengthen and extend Law, safety, predictability. Therefore Christianity, Judaism, even Mohammedanism frowned on witchcraft, that was more allied to Chaos than to orderly physical nature. Though to be sure, science had its perversions, while magic had its laws. A definite ritual was needed in either case, whether you built an airplane or a flying carpet. Gerd had mentioned something about the impersonal character of the supernatural. Yes, that was why Roland had tried to break Durendal, in his last hour at Roncesvalles: so the miraculous sword would not fall into paynim hands... [p. 94-95]