I had a Lionel Castle. I didn't check the gauge of the track but the loco and coaches do run on G track. They will go through both Peco and LGB points.
For me that's where the good news ends. The coaches are only fit for the bin and I can't see that anything can be done with them. I think they are the O gauge coaches on bigger bogies. The loco has many serious failings which make it unusable in a garden railway. The radio control for the loco has a range of about 15ft so the only way it will go round the garden is if you walk round with it. It has a light on the front and the sounds include an American bell. I thought I might convert the loco into a GW 2-6-0 but it was a pretty disappointing loco so in the end I just sold the whole set on. The RC may have improved on the Hornby version but somehow I doubt it.
To be fair it is British outline(ish) and it did actually run.