Ooooo....this could be fun!
Background for how and why the show would exist are moot, I think, given the characters were fictional. At least, until such time as they're on the show. Some method where they're made 'real' within the context of the reality show and have no interaction with the outside world, just the others within the manse, with others appearing or disappearing (as people join or leave), and, of course, the inevitable cameras. And how many fairy tale/Disney characters would know what cameras were?
*raises hand* Interested!