The first few chapters of the novel, dealing with the discovery of Erewhon, are in fact based on Butler's own experiences in New Zealand where, as a young man, he worked as a sheep farmer for about four years (1860–1864) and explored parts of the interior of the South Island. (One of the country's largest sheep farms, located near where Butler lived, is named "Erewhon" in his honour. It is near Mesopotamia Station, another large sheep farm).
In the preface to the first edition of his book, Butler specified
The greater part of the book consists of a description of Erewhon. The nature of this nation is intended to be ambiguous. At first glance, Erewhon appears to be a utopia, yet it soon becomes clear that this is far from the case. Yet for all the failings of Erewhon, it is also clearly not a dystopia, an undesirable society such as that depicted by George Orwell's Nineteen Eighty-Four. As a satirical utopia, Erewhon has sometimes been compared to Gulliver's Travels (1726), a classic novel by Jonathan Swift; the image of utopia in this latter case also bears strong parallels with the self-view of the British Empire at the time. It should also be compared to William Morris' novel News from Nowhere.
Erewhon satirizes various aspects of Victorian society, including criminal punishment, religion and anthropocentrism. For example, according to Erewhonian law, offenders are treated as if they were ill whilst ill people are looked upon as criminals. Another feature of Erewhon is the absence of machines; this is due to the widely shared perception by the Erewhonians that they are potentially dangerous. This last aspect of Erewhon reveals the influence of Charles Darwin's evolution theory; Butler had read On the Origin of Species soon after it was published in 1859.
Butler developed the three chapters of Erewhon that make up "The Book of the Machines" from a number of articles that he had contributed to The Press, which had just begun publication in Christchurch, New Zealand, beginning with Darwin Among the Machines (1863). Butler was the first to write about the possibility that machines might develop consciousness by Darwinian Selection. Many dismissed this as a joke; but, in his preface to the second edition, Butler wrote:
Widely shared among the people of Erewhon is the belief that children choose to be born. Many other curious notions abound in Erewhon.
In the chapter, "Musical Banks", Butler compares the practice of the cathedral to that of banks in an attack on the religious hypocrisy of his time.
In the chapter, Butler mentions that these banks have their own currency, which is not honored by the other banks. This refers to an old practice of coinage. During the age when the whole point of money was that it was made of precious metal, there was frequent trimming or shaving of coins once they were released to the public, even though people were expected to accept the diminished coins at their face value. These bits were sold under the counter to an assayer. There was also widespread counterfeiting. Banks of that era were few and quite magnificent.
It would not do for churches to be implicated in these activities. Thus, churches actually had money-changing tables at which each coin would be examined separately and a token of actual worth given to the layperson so that he or she could be seen by the other parishioners as putting money in the basket during that part of the service. These tokens had religious images upon them; this also prevented pilferage. The money-changing was not done at the same time as the service itself. (Some distinguished Protestant churches in the US had this practice in the 19th century, besides the Church of England and the Presbyterian Church of Scotland). The practice goes back to the days of the Temple in Jerusalem, but then it was done for the different reason — that money offered to the temple did not have the images of pagan gods on it.
The French philosopher Gilles Deleuze used ideas from Butler's book at various points in the development of his philosophy of difference.
In Difference and Repetition (1968), he refers to what he calls "Ideas" as "erewhons." "Ideas are not concepts," he explains, but rather "a form of eternally positive differential multiplicity, distinguished from the identity of concepts. "Erewhon" refers to the "nomadic distributions" that pertain to simulacra, which "are not universals like the categories, nor are they the hic et nunc or now here, the diversity to which categories apply in representation.. "Erewhon," in this reading, is "not only a disguised no-where but a rearranged now-here.
In his collaboration with Félix Guattari, Anti-Œdipus (1972), Deleuze draws on Butler's "The Book of the Machines" to "go beyond" the "usual polemic between vitalism and mechanism" as it relates to their concept of "desiring-machines":
A reference to Erewhon and specifically "The Book of Machines" opens Miguel de Unamuno's short story, "Mecanópolis," which tells of a man who visits a city (called Mecanópolis) which is inhabited solely by machines.
George B. Dyson uses the heading of Butler's original article in Darwin Among the Machines: The Evolution of Global Intelligence (1998) ISBN 0-7382-0030-1.