The Sandcastle Contest is actually three stories that got stuck together. One story was made up for Robert Munsch's daughter Tyya while the family was on vacation on a little island in the Caribbean called Nevis. Tyya was six years old then, and she loved to build sandcastles. Munsch made up a story where she built such a nice sandcastle that everybody thought it was a real castle. This story became one of his "beach stories," and he told it whenever he was telling stories on a beach or in a sandbox.
Meanwhile, every summer, the Luttmans, who live on Munsch's street, loaded up a camper with all sorts of stuff and then put five bicycles on top of the camper and drove off. Munsch decided to make up a story about a family who took along EVERYTHING for a camping trip!
Meanwhile, the Luttman kids were bugging their parents to get a dog. Munsch had made up lots of stories about kids who wanted a dog, but none of them was ever any good.
All of a sudden, these three things got tangled into one story, and out came The Sandcastle Contest.