The name of the dog at the store is Kenny - presumably referring to Ken Williams, CEO of Sierra On-Line.
At the screen above the caverns, one of the mountains in the background is shaped like the logo of Sierra On-Line. When typing "look at valley", the game message ends with "it's a Sierra game!".
Gwydion is the name of a character in Lloyd Alexander's 'The Chronicles of Prydain'. This could be the connection between the names Gwydion and Alexander.
At the end of the game, the theme song from The Smurfs (1981) is played when Alexander and Rosella encounter the old gnome right by the castle.
It is the first game in King's Quest series which includes copy protection.