I speculate that King Hu must have left Shaw Brothers with a bad taste in his mouth after doing "Come Drink With Me". "Come Drink with Me" is also one of the greatest martial arts movies despite having room for improvement. This movie feels to me like King Hu made those improvements in it. I consider this his is his masterpiece. I compare it to the movies of Akira Kurosawa. Too bad that King Hu was nowhere near as prolific. This movie could even be considered his one hit wonder.
King Hu seemed to realize the claustrophobic situation of of the good guys and bad guys face to face in the Dragon Inn was great drama but it had to be contrasted with as much wide open space as possible. In "Dragon Inn" most scenes outside the inn are shot in expansive panoramas. Like Kurosawa, King Hu appreciated the way moving the camera brought the audience into the scene. He used tracking shots, particularly during fight sequences, to get this feeling.
Hang Ying-Chieh gets credit as action coordinator. He was the Big Boss in Bruce Lee's "The Big Boss". Remember when Bruce is cut, wipes off his blood then tastes it? Hang Ying-Chieh does the same here. The sword fights are Japanese style - starting with a suspenseful face off, then a sudden attack to cover the distance, just a few quick strokes of action, then stop and wait a few seconds to feel the results. A real sword cut is initially almost painless so the person cut doesn't know until he sees the effect of the cut.
I rate this as one of the best of 1967 and I recommend it to everyone - not just fans of the genre - to everyone.