This book, its title translated into English in so many ways, is titled, in Chinese, 《水湖传》 or Shui Hu Zhuan (Pīnyīn transliteration).
The author of the Shui Hu Zhuan is traditionally given as Shi Nai'an (施耐庵), reputed to have lived somewhere between 1296 and 1372. However, scholars have increasingly come to believe that Shi Nai'an was most likely a pen-name for Luo Guanzhong (羅貫中), who in any case is acknowledged as a student and probable assistant to Shi Nai'an in the editing of the novel's text as we now have it. Luo was also, without dispute, the author of Romance of the Three Kingdoms (《三國演義》). Shui Hu Zhuan and Three Kingdoms are two of the Four Great Classical Novels (四大名著) of Chinese literature.
The story centers on the exploits of the historical figure Song Jiang (宋江), leader of a large bandit group that operated in prefectures that are now parts of central Jiangsu province, an area described in the book and related folktales as Mount Liang. Historical records, such as the History of the Song or Song Shi 《宋史》, as well as novel itself, suggest his gang were active in this area until their surrender to government troops in 1121. The events of the novel cover a period from early in the 11th century Song Dynasty until the founding of the Southern Song Kingdom in 1127.
The Shui Hu Zhuan (《水湖传》) is widely reputed to have been Mao Zedong's favorite Chinese novel. Given the "Robin Hood" theme of the book (a not uncommon sub-genre, and a frequent source of inspiration for Chinese novels and operas) the appeal to Mao should be self-evident. One might consider Mario Puzo's The Godfather a novel in the same vein, though the latter is positively terse by comparison. The book has since served as inspiration for many movies, television programs, and several video games. Its Japanese translation as Suikoden is also credited with a Japanese fad for neck-to-thigh tattoos during the mid-1800s. You can't make this stuff up. Well, I can't anyway.
One can make a case that this novel, and the tradition of bandit novels in general, provided at least some of the popular inspiration for the Chinese Civil War/Revolution, which ended with the establishment of the People's Republic of China in 1949.
The novel runs nearly 1000 pages in Chinese — much longer in English translation. Chinese novels tend to be far longer than the English equivalent, more akin, perhaps to Proust's Á la recherche du temps perdu, than to the average British or American novel in English — 《水湖传》 might also have served to inspire, in some small part, the leaders of the earlier Chinese Republican Revolution of 1911.
China's deeply frustrated intellectual class, at the beginnings of the 20th century, must have taken some pleasure as well in a book that took as its subject one of many periods in Chinese history when the central government had become corrupt and largely impotent, and where the only real internal power in China was scattered amongst many gang leaders, outlaws and other "marginal" members of society. The title is (of course) an allusion to those margins, as well as to the tensions and unpleasantness that tend to prevail when a nation is ruled from the "swamp" or 水湖.
A decaying and corrupt imperial bureaucracy, under the token control of leftover elements of the hereditary Manchu-controlled Qing Dynasty, and the virtual power vacuum that resulted, formed the backdrop for most of the events and conflicts within modern Chinese society, virtually from the beginning of the twentieth century. The roots of this disgruntlement go back much further, stemming from a long festering status quo where all meaningful control of China's commerce and government had fallen (where there was any control to speak of) into the hands of the wealthy European trading powers, exercised through such weak proxies as the last emperor, Pu Yi, and his Imperial predecessors.
Summary and reflections on a (lecture) by historian of the novel form, Franco Moretti, concerning the "divergence" between the Chinese and European novel forms appears at the link below.
Franco Morretti and the Chinese Novel
If this essay is a fair precis of the actual lecture, I would tend to agree with its author that Moretti engages in an all too common fallacy of Western academics only slightly acquainted with Chinese history and literature, by assuming that the development of the "novel" in its many Western forms is somehow an enviable accoomplishment, and that there must be something wrong with a culture if it has not developed a similar tradition along similar lines.
Another study that looks to be a bit more interesting and less centered in "Western" assumptions and prejudices regarding subjects of Asian history is:
Lost Modernities: China, Vietnam, Korea, and the Hazards of World History by Alexander Woodside