Jack Torrance is informed, when he eagerly accepts the job of winter caretaker at the Overlook Hotel, that the previous caretaker murdered his family and himself. That doesn't seem to phase him or alter his decision. Nothing seems to phase Torrance, and I don't think he ever tells Wendy, his wife, or Danny, his son, that these things ever happened. But this picture is not all about Jack; I would argue that young Danny is the focal point. Danny has a voice in his head, and can see events and nightmarish visions of the future. Dick Halloran, the old man who shows the Torrance's around the facilities, tells Danny that he has "the shining," and that Dick shares the skill. The two form a bond that is quite important later in the film, when things begin to unravel.
The winter comes, and routines begin, but never are the members of the family together as a unit. Jack works on his book, Wendy and Danny work through events as if it were a regular day back home. But Jack's sanity is the first to show signs of slippage. He begins seeing and interacting with ghosts, drinks with a ghost (although there is no alcohol on the grounds of the hotel), and grows increasingly frustrated with Wendy disturbing him while he works. Wendy becomes frightened. Things slowly unravel into madness.
So what about The Shining is so frightening? The visions these three family members have, from the elevator full of blood filling the foyer, to the twin children standing in a hallway where they were murdered, to the erotic dream Jack has that soon becomes something quite the opposite of erotic, all play a part in creating a mood and an atmosphere of dread and impending madness that is going to overtake these people. Not one of the members of the family is a reliable narrator, each having their own sets of visions and interactions with this hotel that keep the audience uncertain as to what is happening and not happening. The uncertainty and the wooden way in which these characters interact creates a dreamlike air about the events as well. And then there is Jack Nicholson, who becomes absolutely unraveled once he is chasing Danny through the maze in the blizzard. Nicholson's performance is the cog in the story and perhaps the main reason I would have The Shining atop my list of the finest horrors ever.