The emergence of the early Romantic theory of literature in Germany towards the end of the eighteenth century constitutes a decisive turning-point in the history of criticism. Incited by Lessing, Herder, and Schiller, and stimulated by Goethe's poetic creations, a new view of the literary work and the artistic process developed that differed sharply from the dominant classicist understanding of aesthetics and poetics. The European classicist tradition had stressed unchangeable norms for art, codified a hierarchical system of immutable genres, bound artistic production to an imitation of nature and an adherence to verisimilitude, and defined poetic unity according to strict rules. The early Romantic critics made decisive inroads into this classicist view of poetry by recognizing the infinite changeability of genres, their constant mixing and mingling, as well as the frequent emergence of new literary forms. They saw the poetic unity of a literary work as an inner conformity with itself, connecting a multiplicity of phenomena to a unity of its own. This task of redefinition, however, could not be accomplished by applying external rules, but was instead to be carried out by the shaping power of the imagination.

Given these features, early Romantic literary theory seems to be closely related to transcendental idealism, the prevailing philosophy of the time. In his Critique of Judgment of 1790 Kant laid the foundations for the autonomy of art, and for the uniqueness and distinctiveness of aesthetic, as opposed to scientific and moral judgments, thus decisively changing the ground rules in the debate about art and the beautiful that had prevailed in European criticism for centuries. Other decisive impulses came from Fichte and Schelling.