This chapter is like a hodgepodge of different Japanese folktales. Takahashi seems to love Japanese history and mythology so much that she does these parodies a lot. Heck, she wrote entire stories with heavy Japanese mythology and historical influences. Most notably, Inuyasha.
Even though I'm not very familiar with these eastern fairytales I still enjoyed this chapter. Takahashi is a master of this craft.
Strangely, I didn't like the fairytale episodes in the anime, probably because they drag on for too long. I liked it in the manga probably because it was short and I could finish it quickly.