Bauer's favorite subject was Swedish nature, the dense forests where the light trickled down through the tree canopies. Ever since he was little he had wandered in the dark woods of Småland imagining all the creatures living there. His paintings frequently included detailed depictions of plants, mosses, lichens and mushrooms found in the Swedish woods. He is best known for his illustrations of Among Gnomes and Trolls.
In a 1953 article in Allers Familje-journal (Allers Family Journal), his friend Ove Eklund stated that "although [Bauer] only mumbled about and never said clearly", he believed that all the creatures he drew actually existed. Eklund had on several occasions accompanied Bauer on his walks through the forests by Lake Vättern, and Bauer's description of all the things he thought existed made Eklund feel he could see them as well.
Ove Eklund on Bauer:
Yes, there he was, John Bauer, with his brown, eternal pipe glued to the corner of his mouth. Now and then he blew a small cloud of brown troll smoke straight up into the turquoise-bleu, sun-sparkling space. And muttered something far behind his tight, narrow lips—not always so easy to decipher. But I, having had the key for many years, understood most of it.
Bauer and his friends were part of a generation of Swedish painters who started their careers just before the Modernism movement began to flourish, but at the same time were considerably younger than those dominating the Swedish art scene: artists such as Carl Larsson, Anders Zorn and Bruno Liljefors. Bauer was inspired by these artists, but from his heritage came in contact with Fritz Erler, Max Klinger and other German illustrators. He lived in an era when the Old Norse were romanticized throughout Scandinavia, and borrowed ideas and motifs from artists like Theodor Kittelsen and Erik Werenskiöld, yet his finished works were in his own style. After his journey to Italy his works clearly showed elements from the 14th century Renaissance. The pictures of princes and princesses had elements from Flandic tapestries, and even the trolls garments were pleated, much like the draped clothing seen in antique Roman sculptures.
Bauer had a time consuming technique when painting: he would start with a small sketch, no bigger than a stamp, with just the basic shapes. Then he would make another, slightly bigger, sketch with more details. The sketches grew progressively in size and detail until the work reached its final size. Most of the originals for About Gnomes and Trolls are square pictures about 20 to 25 centimetres (7.9 to 9.8 inches). He doodled on anything at hand, from used stationary to the back of an envelope. Many of his sketches resemble cartoon strips where the pictures get bigger and more detailed. He would also do several versions of the same finished picture, such as one where the motif is depicted in a summer and winter scene. He did not observe the traditional hierarchy in the mediums or techniques at that time. He could make a complete work in pencil or charcoal just as well as a sketch in oil.
From an early age Bauer had to adapt his illustrations to contemporary printing technique. Full-color was expensive, so the illustrations were made in one color plus black. As the process developed and his works became in greater demand, his pictures were eventually printed in full color.