Bernie Taupin wrote "Daniel" while inspired by the events of the Vietnam War. The lyrics (including a verse in the original draft that was cut from the final version) describe a fictional veteran who was blinded as a result of the war ("your eyes have died"/"but you see more than I") and travels to Spain to escape those around him back home ("do you still feel the pain"/"of the scars that won't heal?"), including his brother, from whose point of view the story is told.
"'Daniel' had been the most misinterpreted song that we'd ever written," explained Taupin, in the Two Rooms tribute project. "The story was about a guy that went back to a small town in Texas, returning from the Vietnam War. They'd lauded him when he came home and treated him like a hero. But, he just wanted to go home, go back to the farm, and try to get back to the life that he'd led before. I wanted to write something that was sympathetic to the people that came home."