Here is summary of an area of (what I perhaps optimistically call) Disney Studies that has developed; the ideas of Disneyfication and Disneyization. Commentators often use the words interchangeably or inadvertently mix them up, but each describes a separate phenomenon related to Disney.
Disneyfication is more closely tied to the Disney animated films, and its verb form 'to Disneyfy' explains its meaning. Disneyfication is the transformation of something into a childlike, family, perhaps simpler, form. Often used negatively, Disneyfication may be accused of sanitizing history or literature, Americanizing it, or making it overly saccharine. Richard Schickel, in his book 'The Disney Version' most scathingly attacks Disneyfication, explaining that "magic, mystery, individuality, were consistently destroyed when a literary work passed through this machine that had been taught there was only one correct way to draw."
Personally, I don't agree with Shickel, and immediately his argument of only one Disney art style can be quickly disproven. A closer look at Disney's animated library reveals the natural realism of Bambi, the classic Disney roundness of Cinderella, the wonderful stylization of Sleeping Beauty, the abstraction of Fantasia, the surrealism of Dumbo's Pink Elephants sequence, and hundreds more variations and experiments throughout Disney's archive of animated films, shorts and live action pictures.
The frequent argument that Disney 'ruins' the fairytales of the Brothers Grimm completely misunderstands the history of fairytales. The Brothers Grimm did not invent these stories - they were simply the first to write them down. Before that, they were an oral tradition, with one storyteller passing it on to the next, each emphasising the aspects they liked, changing each retelling, and like a game of telephone, allowing the story to evolve as it passed throughout the communities. Walt Disney is just the latest in a long line of these storytellers, perfecting within his rights to tell the stories as he wishes to tell them - and to his credit, he has been so successful that many think of his retellings as the definitive version; we have often heard how many think Happy, Grumpy, Doc and so on are the traditional names of the seven dwarfs, when in fact they are a Disney creation.
Disneyization meanwhile, refers to a cultural phenomenon in which more and more of the real world is beginning to resemble a Disney theme park. It is a follow-on from McDonaldization, the idea that more and more of the real world is beginning to resemble a fast food restaurant - comprised of Efficiency (both in production and in pleasing the customer), Calculability (aiming for quantifiable data, for example sales rather than taste), Predictability (reassuring the same product and level of service will consistently be available) and Control (both technologically by replacing workers with machines, as well as standardizing employees in their training and appearance).
Disneyization comprises of five aspects; theming, hybrid consumption, merchandising, performative labour and control & surveillance.
Theming, the identifying feature of a Disney theme park, has now spread beyond the berm, in that restaurants, shops, hotels, zoos and so on may theme themselves, infusing them symbolism and a constructed history that enhance their appeal. The service provided is enhanced with entertainment, and in a society which relies increasingly more on service over goods, it is a way of plussing themselves, making them unique, and able to charge a higher price.
Hybrid Consumption refers to the blending of services and products in an effort to provide more and retain customers longer. Visiting a theme park is not just riding rides, it is dining, shopping and entertainment, just as a mall will provide entertainment or a restaurant will sell merchandise of itself.
This leads on to Merchandising (and similarly branding), which is the marketing of what would typically be rather indistinguishable items with the logo or creative property of a particular cultural construct. A movie is no longer a movie; through 'synergy' it is the launching point of books, CDs, DVDs, clothing, toys, home goods, merchandise ... and even theme park attractions. By establishing a brand, companies can guarantee higher revenues for a longer duration.
Performative Labour, highly visible in the service industries, is the embellishment of an employee’s role as a service provider to that of a performer. Just as Disneyland workers are not simply staff, they are Castmembers and part of the show, this same expectation is found in chain restaurants and shops. It is epitomised by the smile - a perhaps artificial enthusiasm for helping the customer. Companies recognise that this theatre, like theming, can separate them from the competitors and establish a reputation for service and experience.
Finally, Control & Surveillance is the element which binds the others together. Control & Surveillance refers not only to the business themselves, but also to their customers. Disneyland imposes a dress code on its visitors, and prohibits certain items from its park, but more indirectly filters the type of guests who enter its parks with the high cost of entry to what is typically middle class. Guest movement is specifically channelled, flashes are restricted within attractions, and Disney's real estate and intellectual property are vehemently guarded. For some, even the guests’ imagination is manipulated by the Disney parks (although largely in disagreement with the argument that Disneyland limits the imagination). Disney employees are limited to a specific look, behaviour and personality - their hair, facial hair, make-up and jewellery specifically controlled, and their interaction programmed through Disney University training programs and scripts. Every aspect of the business, from the employee to the customer, is managed to create the desire response.
Those are the fundamental arguments of Disneyfication and Disneyization. While both are often used pejoratively, this is perhaps too simplistic. The Disney traditions have guaranteed a successful and popular product consistently for decades, elevating the company to the top of its fields. Other companies may try to mimic Disney's practices, yet none have yet surpassed them - and they do this because, almost universally, this is what contemporary customers desire.
For further information, I highly recommend Alan Bryman's book The Disneyization of Society and suggest similar theoretical ideas such as McDonaldization, Cocacolonization and Walmarting.