Animated puppet film, A Midsummer Night’s Dream (1959) by Jirí Trnka. I’ve featured works by Trnka before (remember The Hand?), but not this one, which is probably his masterpiece.
The setting is Greek, not Elizabethan, like so many other adaptations, and it’s kind of sensual, warm, and the characters in it are graceful and believable. Animation Hall of Fame.