It has been two years since The Gruffalo author Julia Donaldson moved to Steyning and she is still enjoying a “honeymoon period” in the smallest town she has ever lived in.

Previously a resident of cities including London, Bristol, Glasgow and Lyon, it was when she visited friends in Steyning that she was struck by the contrast between its lifestyle and those of the suburbs of big cities.

“It’s smaller but bustly,” she explains. “I love it. I love the High Street - I counted 80 shops where you can just go and buy fish, bread, clothes, books in different shops. I don’t go to supermarkets any more. And the countryside, which I love, is just on our doorstep. I often go for walks on the Downs.

“The lifestyle here is lovely, lively and just simply better.”

Julia, 67, and her husband Malcolm, a retired paediatrician, have thoroughly immersed themselves in small town life in Steyning. In their first year in the village, they took part in biennial Steyning Festival, and this year Julia is one of its star attractions (see our feature on p42). At Steyning Grammar School, Julia will be entertaining children aged between five and 10 by acting out her own stories and singing her songs accompanied by her sister Mary and two actors, with Malcolm on guitar.

The programme features three songs and four stories, including, of course, The Gruffalo as well as her latest book, What The Ladybird Heard, which was published last year, and her 2014 book The Scarecrow’s Wedding, which has been adapted for the West End stage and will be at Leicester Square Theatre in London this summer.

“It’s lovely when the children are enjoying the show,” says Julia, who was Children’s Laureate from 2011-2013. “And especially when you get the sweet ones up on stage. But things can go wrong – we have had wee wee on the stage! It can be a challenge sometimes... But I also love the book signings at the end of the show, because I enjoy hearing what the children’s names are. I collect them, make a list of them – it’s a bit of a sociological experiment of mine, to see which children’s names are the most popular.”

The Gruffalo is probably the bestselling author’s most famous book, published in 1992 and illustrated by Axel Sheffler, and introducing words such as ‘crivvens’, ‘bumbazed’ and ‘dumfoonert’. It has sold more than 13 million copies and has won several prizes, including the 1999 Nestle Smarties Book Prize. In 2010, it came first in a list of children’s favourite books in a survey by the charity Booktime.

The Gruffalo is just one of Julia Donaldson’s 184 published works, including Room on the Broom in 2001, and The Smartest Giant in Town in 2002, both also illustrated by Axel Sheffler. In an interview with The Independent last year, she described how the German illustrator sometimes misunderstood some of her references. “Although he speaks perfect English, in the text of The Smartest Giant in Town, the giant buys some socks with diamonds on the side; I meant those Marks & Sparks Orlon socks with a diamond pattern. When Axel’s roughs came in, he’d given the giant an 18th century look, knee britches, bulgy calves and real diamonds...”

Born in 1948, she was brought up in Hampstead in London, where she lived in a Victorian house with her parents, Oxford-educated James, a psychiatry lecturer, and Elizabeth, a translator, her sister Mary, an aunt and uncle and a cat named Geoffrey. She has described Geoffrey as “really a prince in disguise – Mary and I would argue about which of us would marry him”.

The house was full of literature, poetry and music, and she developed a passion for acting: “Mary and I were always creating imaginary characters and mimicking real ones, and I used to write shows and choreograph ballets for us. A wind-up gramophone wafted out Chopin waltzes.”

Later, she understudied at the Old Vic where she met a young Judi Dench and Tom Courtenay, and studied Drama and French at Bristol University, where she immersed herself in productions. Julia and her friend Maureen Purkis buddied up with fellow students Colin Sell, a pianist who has appeared on the radio panel game shows I’m Sorry I Haven’t A Clue and Whose Line Is It Anyway, and his room-mate Malcolm Donaldson, a medical student. The four sang in pubs together and Julia, Maureen and Malcolm spent six months busking in Paris.

Julia and Malcolm became a couple, busking across America and in Europe over the next couple of years, and when they returned to England joined a theatre group that devised unscripted plays to be performed outside in council estates and invited children to join in.

In 1972, Julia and Malcolm were married and would go on to have three sons, Hamish, who died in 2003, Alastair and Jerry. They moved to Brighton in 1974, and her experience in busking led her into a career in singing and songwriting, mainly for children’s television, including the BBC children’s programme Play Away.

It wasn’t until Julia was 45 that she began to write The Gruffalo, inventing the name of her monster by choosing “gr” for its first letters as it sounded fierce, “o” at the end as it was easy to rhyme with, and filling the middle with “uffal”.

“I really enjoy writing verse, even though it can be fiendishly difficult,” Julia says. “Funnily enough, I find it harder to write not in verse, though I feel I am getting the hang of it!”

Published by Macmillan, it was an instant hit and more books followed, also illustrated by Axel Sheffler. Julia was launched into the literary stratosphere, her background in acting, busking and songwriting proving the ideal formula for appearances, shows and performances at literary festivals and other events around the country.

And the ideas are constantly fomenting in Julia’s imagination. Earlier this year, she and Malcolm spent a month in South Africa and, she says, returned with inspiration for a story. “I discovered that as well as the five big beautiful African animals – the lion, the elephant and so on – there is also the ugly five, including the hyena and the warthog. Now what about a book called The Ugly Five?” she muses.

“It is not hard to get an inspiring idea,” she explains. “The hard part is what is actually going to happen in the story and then crafting it.”

This summer, her next book entitled The Detective Dog, illustrated by Sara Ogilvie, will be published, a fast-paced book about a dog called Nell who uses her keen sense of smell to sniff out the culprit when a school’s books disappear. And she is very keen to write a musical for adults – when she can find the time in between her many appearances around the country.

“Driving to London and Scotland and around the country to festivals and other lovely places means we are still very active – and it makes me enjoy coming back to Steyning very much,” Julia says.

• Julia Donaldson appears at the Steyning Festival in The Gruffalo and Friends at 4pm on Saturday June 4 at Steyning Grammar School, Shooting Field, Steyning. Tickets £7, u18s £5. For details, visit steyningfestival.co.uk.

• Signed copies of Julia Donaldson’s books are available at The Steyning Bookshop, 106 High Street, Steyning, and on its website: steyningbookshop.co.uk. Phone 01903 812062.