Twelfth Night is one of Shakespeare’s so-called transvestite comedies, a category that also includes As You Like It and The Merchant of Venice. These plays feature female protagonists who, for one reason or another, have to disguise themselves as young men. It is important to remember that in Shakespeare’s day, all of the parts were played by men, so Viola would actually have been a male pretending to be a female pretending to be a male. Contemporary critics have found a great deal of interest in the homoerotic implications of these plays.

The songs in the play, which keep the action light-hearted and boisterous, were also most likely either inspired by or directly taken from popular songs of the day. Though many of Shakespeare's themes are universal, often specific jokes or comments are so tied to Shakespeare's cultural moment that they are difficult for today's critic to decipher. The content of the play, and especially the jokes, also assumed a certain level of education within the audience. For example, Maria describes Malvolio's smiling face as like a map of the recently discovered Indies. It is unclear whether all of Shakespeare's audience would get these jokes, though usually his cultural references were well-known, at least for a short time.

As is the case with most of Shakespeare’s plays, the story of Twelfth Night is derived from other sources. In particular, Shakespeare seems to have consulted an Italian play from the 1530s entitled Gl’Ingannati, which features twins who are mistaken for each other and contains a version of the Viola-Olivia-Orsino love triangle in Twelfth Night. He also seems to have used a 1581 English story entitled “Apollonius and Silla,” by Barnabe Riche, which mirrors the plot of Twelfth Night up to a point, with a shipwreck, a pair of twins, and a woman disguised as a man. A number of sources have been suggested for the Malvolio subplot, but none of them are very convincing. Sir Toby, Maria, Sir Andrew and the luckless steward seem to have sprung largely from Shakespeare’s own imagination.

The key to the meaning of Twelfth Night is in the title. Twelfth Night is the only one of Shakespeare’s plays to have an alternative title: the play is actually called ‘Twelfth Night, or What You Will’. Critics are divided over what the two titles mean, but 'Twelfth Night' is usually considered to be a reference to Epiphany, or the twelfth night of the Christmas celebration (January 6), as in the popular song “Twelve Days of Christmas”. It marks the Feast of the Epiphany, a culmination of the Christmas period, a holiday in Western Christian theology that celebrates the day that the magi (a.k.a. the three wise men) presented gifts to the newborn Jesus. It represents the manifestation of Light, or Truth, to those who have enough understanding to perceive it. This revelation of Light, or Truth, is the subject of the play, with Viola eventually revealing her true identity as a woman.

Critics argue about whether or not the play was written specifically for the Twelfth Night. Leslie Hotson argues that Twelfth Night was performed for Queen Elizabeth and her guest, Count Don Virginio Orsino, on January 6, 1601 (Orsino, of course, is Viola's love interest in the play). Some argue that the play was written later, but even those who refute Hotson's argument acknowledge that the world of the play celebrates the spirit of Twelfth Night festivities. Twelfth Night, in Shakespeare’s day, was a holiday celebrated by a festival in which everything was turned upside down. Elizabethan communities often appointed young boys as "Lords of Misrule"; it was a chance to play king for a day - much like the upside-down, chaotic world of Illyria. This rebellious spirit is reflected in figures like Sir Toby Belch and Sir Andrew Aguecheek, alongside Feste's singing and comedy.

Some theorize that the second part of the title was an afterthought: when someone asked the playwright "the name of the play, Shakespeare replied, "Urm, Twelfth Night, or what you will" (as in, "I don't know – whatever"). The second title seems to invite the audience to make "what [we] will" of the play – what it means, and why it matters (if it matters at all) -  it is entirely subjective.

Some directors of the play have taken the title literally, paying close attention to the Elizabethan rituals related to Twelfth Night; others have disregarded it entirely, and set the play in the sunny Mediterranean, where the historical "Illyria" is located or, as we have done, in 1920s England.