It's 'The Light(noun) Fantastic(adjective)'
That's how it is used both in Milton:
On the light (noun) fantastic (adjective) toe (verb)
and how this construction is generally rendered in English. Examples:
The Brothers (noun) Grimm (adjective)
The Brothers (noun) Karamazov (adjective)
In 1492, Columbus sailed the ocean (noun) blue (adjective)
A Tale (...
In-universe the "light fantastic" is an actual, factual thing.
There was no real need for the torches. The Octavo filled the room with a dull, sullen light, which wasn’t strictly light at all but the opposite of light; darkness isn’t the opposite of light, it is simply its absence, and what was radiating from the book was the light that lies on the far ...
The light that Pratchett refers to is Octarine.
This is defined in the Discworld books as the eighth colour of the spectrum and the colour of magic. "The Colour Of Magic" itself being a title of another book in the series.
This is fantastic because its existence is part of the Discworld fantasy universe. Pratchett is very fond of such puns and ...
It is a punning reference to the phrase ‘trip the light fantastic’, which means (per The Phrase Finder)
To dance, especially in an imaginative or 'fantastic' manner.
The phrase seems to arise from the works of Milton, in Comus he wrote, as you have already seen,
Come, knit hands, and beat the ground,
In a light fantastic round.
And in L’Allegro