We could perhaps blame Ronald Reagan for the fact that Laura Ingalls Wilder isn’t better understood. In the 1970s, he told an interviewer that Little House on the Prairie, loosely inspired by one of her novels, was his favourite TV show. He used to well up watching its moralising tales about the homesteading Ingalls family, led by the often shirtless Pa (the star and producer Michael Landon). But the show was far removed from the focus of the eight original Little House novels, in which a girl called Laura recounted her life from childhood to marriage, witnessing the eviction of Native American tribes, the coming of the railroad and the agricultural destruction of the prairies that set in train the ecological disaster of the Dust Bowl. In the 150th year of Wilder’s birth, I headed to her former farmhouse for the annual celebratory Wilder Day to try to assess the writer’s place in modern American identity.

There are Amish men in their horse-drawn buggies along the edge of the freeway as you drive to Mansfield, Missouri. It is still farming territory and according to the US census bureau, one of the 100 poorest towns in the US. In the visitors’ car park of Rocky Ridge Farm museum, Wilder’s fine stone house on a hill, there are large Mennonite family groups – the women in floral home-sewn maxi dresses, their hair in modest buns. This corner of the Ozarks is still defined by the culture of the white pioneer settlers who arrived 120 years ago.

When Wilder and her husband, Almanzo, moved here from South Dakota in 1894, she was still in her twenties. They had lost their original farm as a result of drought and crushing debt in the aftermath of the 1893 Great Panic – a banking crisis far worse than the 1929 Wall Street Crash. With a 100-dollar bill hidden in her writing box – all that they had left – she, not Almanzo, bought the land on which they built Rocky Ridge Farm; and it was here she wrote her novels, intertwining fact and fiction.

Since then the house has become a site of pilgrimage. Many visitors see Wilder as an all-American patriot of traditional values, while liberals claim her as a proto-feminist who refused to say “obey” in her wedding vows, and whose stories celebrated a dark-haired rebellious little girl who hated being “ladylike” and “good” like her angelic, passive sister Mary. There are Wilder sites of interest all over the Midwest, from Wisconsin to South Dakota; she wrote about real places and events, carefully editing out the worst suffering, such as the death of her infant brother Freddy.

Stepping inside the beautiful wood and stone home – the kitchen counter was made for Wilder’s tiny 4ft 11in frame – is profoundly moving. This is a girl who had lived much of her life in poverty; it wasn’t until her sixties that she began writing down her family memories. It was an exercise in what Wordsworth called “emotion recollected in tranquility”. But the timing was anything but tranquil – the Wall Street Crash had wiped out her and Almanzo’s savings for the second time. Between the appearance of her first book, Little House in the Big Woods, in 1932, and her last, These Happy Golden Years, in 1943, she became a bestselling children’s writer, a success partly helped by General MacArthur putting the sixth Little Prairie book, The Long Winter (1940), on a list of postwar reconstruction literature for Japanese and German schoolchildren.

Wilder’s comforting tales proved globally popular during the austerity of the 1940s – the books are full of endurance but also moments of great feasting, and the descriptions of celebratory baking are particularly appealing. A number of schools and libraries were named after her, notable the children’s reading room in Pomona, California, which keeps the original handwritten manuscript for her seventh novel, Little Town on the Prairie. What satisfaction for a woman, still girlish with her silver hair, who had never finished high school.

At the Wilder weekend, I meet many children, especially young girls with bonnets and long, Laura braids, all fans of the books, who’ve come with their parents to watch displays of traditional crafts such as spinning. I meet three generations of one family – grandmother, daughters and granddaughters – who argue playfully over who gets to be Laura. It’s a similar attitude to that described by Chicago writer Wendy McClure in The Wilder Life, written with a sense of self-aware fun in aftermath of the 2008 economic crash, when urban women were rediscovering the world of the Little House books and having a go at quilting and butter making. And it’s the same way that austerity fashion and knitting found a new generation of enthusiasts in Britain.

I spot the actor Dean Butler amid the craft stalls – he played the heartthrob Almanzo in the late Seventies/early Eighties TV show. The Little House series was “never cool”, he says, but he thinks that, like The Waltons, its celebration of family values and decency was valuable in the aftermath of Watergate and the oil crisis. I’m taken aback by the strength of his concern about what’s happened to his country: “I think America needs things like Little House more than ever before. We have become so caustic in our rhetoric to each other. The politics in this country right now are absolutely poisonous. In my lifetime, and I’m 61, I have never experienced the vicious hostility that exists between people.”

Throughout the day I hear traditional folk songs such as “Old Dan Tucker” being played on Pa’s actual fiddle in a fiddle-off contest. This is the power of the stories: the way they bring history alive with a seductive good-heartedness. The biographer Pamela Smith Hill, the author of a 2014 annotated version of Wilder’s original memoir Pioneer Girl, thinks the reason Wilder remains underrated is because of the deceptive simplicity of her prose. She highlights a passage in The Long Winter, Wilder’s darkest novel, in which Laura’s dreamlike state as starvation and the freezing temperature take hold captures the perceptions of a child with hypothermia.

The trouble over Wilder’s legacy is two-fold. First, there’s her family’s politics. Her daughter, the journalist and pulp writer Rose Wilder Lane – hugely influential in the 1930s and 1940s – was one of the so-called “godmothers” of libertarianism along with Ayn Rand. Rose was undoubtedly instrumental in getting her mother published, though she also plagiarised Laura’s manuscripts for her own, now largely forgotten, books and became increasingly unhinged in her rantings about Franklin D Roosevelt, Jews and her love of Mussolini. Most contemporary scholars feel that Wilder was deeply uncomfortable with her daughter’s more extreme views.

But there remains a dilemma over the perspective of the Little House books themselves, as Butler hinted, in an America battling anew over Civil War memorials. As early as the 1950s Wilder amended one phrase in Little House on the Prairie from “no people” to “no settlers” after a reader complained about the line: “There were no people, only Indians.” The Osage Nation, whose land the Ingalls occupied illegally, continues to condemn the novels, which view its expulsion as a romantic farewell.

Professor Frances Kaye, who teaches Plains literature at the University of Nebraska-Lincoln, was unusual as a child in the 1950s for rejecting the Little House stories. She remains concerned about the way the novels, with their descriptions of Native Americans as wild savages and their celebration of white Christian manifest destiny, are still held up as moral exemplars to young children. “I think Wilder was writing as honestly as she knew. Pa explains, ‘This is the way it always goes. Settlers move in, the Indians move out.’ And Laura says, ‘Why?’ And he says, ‘Don’t worry about it. It’s just the way things are.’ I don’t think she was an Indian hater… But we tend to teach books about race that show normative white views and make white people feel good about themselves.”

Kaye is unimpressed by the feminist defence of Wilder as an important, rebellious voice in pioneer literature. “Certainly in terms of working with the Indians, as missionaries, as matrons, as schoolteachers, white women got a lot of power out of the disempowering of native people. That’s not something that you can be happy about… If we don’t recognise that then we’re still justifying imperialism and colonialism. Native people are still more likely to be in prison. That’s because of this dispossession.”

On the plane to Missouri I looked out and saw the moon and the Milky Way shining over the landscape of freeways and towns that grew up just in Laura’s lifetime. Born in 1867, she died in 1957, a few months before Sputnik. The Little House books capture ordinary lives that were witnesses to a massive transformation. It is possible to love them but also to challenge their underlying mythology. Wilder’s stories will continue to draw readers to the Rocky Ridge Farm, where she is remembered with such love. “They could not be forgotten, she thought,” writing about Ma and Pa at the end of Little House in the Big Woods, “because now is now. It can never be a long time ago.”

Samira Ahmed’s documentary “Laura Ingalls’s America” is on BBC Radio 3, Sunday 10 December, at 6.45pm