I’m writing tutorial for fantasy game with said goblin acting as an example. Now, I need to relate to the thing belonging to that goblin, let’s say it’s an apple. Is it his apple or its apple? Shall I treat mythological creature as a human or as an animal?
The choice depends on whether you are intending to treat the creature as a person, not a human or animal. For instance, Charlotte’s Web anthropomorphises animals, using his or hers for ownership. On the other side of the coin, it was typical to refer to the belongings of slaves as its; even though they were human, they were not considered people.