Zorba the Greek by Nikos Kazantzakis (1946) — The great novel of Cretan character, set during a lignite mining venture on the island. Zorba is earthy, passionate, philosophical, and magnificently irresponsible; the narrator, an intellectual trying to live in his head, is transformed by knowing him. Kazantzakis was born in Iraklion and is the island's most famous writer.
Freedom or Death by Nikos Kazantzakis (1953) — Set during the uprisings against Ottoman rule in the 1860s, this is a fiercer, more violent book than Zorba — a portrait of the Cretan capacity for resistance and self-destruction that explains the island's history better than any textbook.
The Island by Victoria Hislop (2005) — A novel about a family connected to the Spinalonga leper colony. Not great literature, but enormously popular and responsible for turning Spinalonga into a major tourist attraction. Worth reading before visiting if you want the emotional backstory.
The Palace of Knossos by Rodney Castleden — A careful, sceptical assessment of Sir Arthur Evans's reconstruction of Knossos and what we actually know (and don't know) about the Minoans. Essential reading for anyone who wants to visit Knossos with open eyes.
Ill-Starred Captain by Theocharis Detorakis — A good general history of Crete translated into English, covering the Minoan period through Ottoman rule and the Battle of Crete (1941). Useful context for the whole island.