The Adventure of the Red Falls by David Lewis Vaughan.

When John, June and Mary move to the countryside they can’t wait for a new life full of adventures.
Their days are filled with exploring, fishing, camping, and meeting the locals, including Peter, who scares them with tales of ghosts and ghouls haunting the inn where they live.
 
Then one night, a storm breaks and Mary gets lost. During the search for her, they stumble on a secret passage and find themselves in a magical land full of fantastical creatures. Here they encounter the wicked witch Malgore and her putrid pet Prog. 
 
Will they escape her evil clutches? Will they break her curse? And will they make it back home?