Using Jakob Fries's epistemological scheme of Wissen, Glaube, and Ahndung, "Understanding, Belief, and Aesthetic Sense," (to use Kent Richter's translation), Ruldolf Otto expands the meaning of Ahndung beyond the merely aesthetic by introducing the category of numinosity, which is the quality of sacred or holy objects, persons, or experiences in religion. Although Otto is often classified as a theoretician of mysticism, "numinosity" is not fundamentally a theory of mystical experiences, because every practionier of any religion regards certain things as sacred to that religion. The "sacred" and the "holy," and the "unclean" or "polluted," are categories that apply (non-metaphorically) to peculiarly religious objects in an entirely universal and cross-cultural manner.
Otto's greatest limitation is in fact the residual rationalism of Kant and Fries. This is expressed best by Otto himself, in the foreward to his famous The Idea of the Holy [Das Heilige, 1917]:
Before I ventured upon this field of inquiry I spent many years of study upon the rational aspect of that supreme Reality we call "God," and the results of my work are contained in my books, Naturalistische und religiöse Weltansicht (Eng. Tr. "Naturalism and Religion", London, 1907), and Die Kant-Friesische Religions-Philosophie [The Philosophy of Religion based on Kant and Fries, London, 1931]. And I feel that no one ought to concern himself with the "Numen ineffabile" who has not already devoted assiduous and serious study to the "Ratio aeterna".
What Otto inherited from Kant and Fries was the theory that reason itself unavoidably and necessarily produces the "Ideas" of God, freedom, and immortality. Otto therefore regarded religions as more developed, not just in the sense that they embodied refined moral conceptions, but in so far as they were associated with the concept of God and the retributions or rewards of an afterlife. Since religions like Buddhism did not have a God, and religions like Islâm did not have a sufficiently, for Otto, moralized God, they were developmentally inferior to Christianity.
Thus, ironically, while Otto is often dismissed as a mystic, the real barrier to the generalization of his system was the rationalistic theology of Kant and Fries. If reason is not regarded as naturally and necessarily productive of Christian theological concepts, then nothing prevents Otto from properly recognizing the common elements of all world religions. There is no doubt, indeed, that the Buddha, as the "Blessed One," is a supremely numinous person, whatever his ontological status with respect to ultimate reality. The tendency to personalize the object of religion can thus be acknowledged, without requiring the metaphysics of a Supreme Being. Similarly, the element of arbitrariness in the Will of God in Islâm is no more than a reflection of the polynomic independence of numinosity and morality. This has recently been nicely expressed by Jacques Barzun:
The truth that religion and morality are at odds with each other is rarely acknowledged, probably because the two desires are equally strong in the human breast, reflecting there the respective demands of society and of the self. [From Dawn to Decadence, 1500 to the Present, HarperCollins, 2000, p.55]
The Friesian would only correct this to say that the "respective demands" are, not "of society and of the self," but of reason and of Ahndung.
Otto's point cannot be appreciated until religion is understood as addressing more than what is right and wrong or good and beautiful. The final mysteries of life and reality cannot be answered by science, ethics, politics, or art; for none of them can even begin to address the issue of the meaning or purpose of the whole, or of the sufferings of an individual human life, which inevitably comes to a more or less arbitrary and unsatisfactory end. Nevertheless, most human beings have lived their lives and reached their ends with some sense of ultimate meaning, however irrational or inexplicable, whether through an overtly religious approach, philosophical resignation, or some obviously fraudulent religion substitute (Marxism, etc.). Otto's Friesian theory, only a footnote to philosophy and religion in the 20th century, nevertheless has offered the best chance for conceding to each its due for philosophy, science, religion, and the plurality of world religions.
Otto's falling out with Leonard Nelson, by whom he was introduced to Friesian theory, was due in part to Otto's greater political conservatism and to the rationalism that led Nelson to make vaguely positive statements about religion but not specifically positive statements about any actual religions. Even Otto's preference for Christianity did not prevent him from exhibiting great interest in all world religions.
The Kant-Friesian Theory of Religion and Religious Value
Rudolf Otto Biography at "Religionsgeschichtliche Schule"
Rudolf Otto in Rem B. Edwards' Reason and Religion
History of Philosophy
Philosophy of Religion
Otto on Home Page