User blog comment:Dragonfire8/Peasants being able to read/@comment-5674726-20131012005151/@comment-5674726-20131013000401

If Uther truly believed that magic was a learned ability, it'd make sense for him to want to protect his subjects from magic as much as possible by ensuring that they weren't in a position to read magic books. The Druids would be a particular threat if they pass on their knowledge orally rather than in writing.

Even if it's not actually illegal for commoner children to be taught to read, it could be viewed with extreme suspicion, so much so that even the few commoners who could read before the Great Purge would have to think long and hard about whether they are going to teach their children, given that it could lead to them being suspected of magic or some other nefarious activity. Hunith would be an exception to that rule as she knew that, sooner or later, her son was going to need to learn more about magic.

Since Gaius and Geoffrey are older and have jobs that would require them to be able to read, it's accepted but it could be that the younger generation of commoners are expected to be illiterate - even Gwen might only have an extremely rudimentary grasp of literacy if she was reluctant to accept Morgana's offer to teach her for fear of losing her job if she was thought to be getting ideas above her station. As you say, it could be a contributory factor to the attitude that the nobility are superior to the peasants. It could also have been a plot point later in the series, when Arthur wanted to marry Guinevere, as she would be deemed to be incapable of supporting and advising Arthur, as a Queen should, if she was barely literate, at best.