Who and What are the Fay?

Who and what fay really are baffles human scholars to no end. On the one hand, they are magical, ancient beings who seem to come from and dwell mostly in another world, only manifesting in the mundane sphere by their own will. However, no one who has ever encountered the fay can deny that they seem to be tangible, physical creatures. Depending upon locale and language, fey are referred to by many names: landwights, gnomes, leprechauns, feja, selkies, sidhe, fairies, elves, sprites, dryads, fauns, keijukainen, eudaimonia, teraphim, nephilim, nymphs. As with draugen, or dark elves, fay almost never appear in broad daylight. Instead, they visit human settlements at night or during foggy, misty days; otherwise they are encountered in the deep shade of virgin forests. At sea, fay ships and crews seem to travel exclusively in fog, storms, and in other inclement, low-visibility conditions. The only known fay-ruled communities and strongholds are located in Brittany and Lithuania, although the local peasantry is still either human or perhaps half-fay at most. The fay, it is presumed, stay within their forests and fairy-mounds during the day, inviting humans into their grand soirees only at night.
Ignorant peasants and overzealous Christian clerics claim that fay are actually foul creatures of the night, a sort of demon, perhaps. They claim that fay steal babies and lay magical curses upon the toils of ordinary Christian folk. Certainly, most heathen households tend to prosper near fairy lands while Christian households often do not, being beset with a much higher rate of disease, stillbirths, and general misfortune. The zealots attribute this to the evil machinations of the fay, while heathens attribute their own success to their close relationship to their fay neighbors.
Outside the fairy heartlands of Brittany and Lithuania, and a handful of lands whose human inhabitants are on friendly terms with fay, one almost never encounters them. However, one does occasionally meet half-elves, or fay-touched. These are humans who, by being adopted by and raised in elven households, enjoy certain benefits reminiscent of the fay. Some extremely rare fay-touched are a true blend of fay and human blood, or fayborn, in which case they begin life with fairy abilities that come to their non-sanguine foster-brethren only with age and practice. Both fay-touched and fayborn tend to be extremely long-lived and talented in one or more of the magical arts. These benefits come with a price, however: fayborns and fay-touched prefer to live apart from their fellow humans. Their manner of dress, eating habits, and language are all strongly influenced by fairy forms. A fay-touched who is willing to forgo his fay ways in preference for those of the human society in which he lives is considered an ingrate and outcast by Fairy. As such, a fay-touched who does not stick out like a sore thumb among other humans is rare. This makes for a certain degree of mistrust, ostracism, and enmity between fay-touched and humans of either a zealous Christian or a draugish affiliation.
Magic-users tend to be knowledgeable about the fay in their region. Sorcerers in particular are almost all either fay-touched themselves, or strongly allied with the fay community, as are their clerical counterparts, the Druids. All fay and fayborn are by nature and culture users of magic to some degree. Heathen clerics possess a similar degree of expertise on the subject of fay to that of magic-users. Druids claim that certain sacred trees are actually the physical manifestations of fay spirits, and guard them with their lives. Druid lore expounds upon this subject ad infinitum, but few outside of their colleges can even comprehend such lore, much less lend any credence to it.
Fay come in many shapes and sizes. There are man-sized or near-man-sized high elves. Wood elves (also called sylvan elves, wild elves, wylfs or dryads) are slightly smaller, averaging the height and build of human adolescent children, with hair and skin color that blends with their environment. Gray elves, or elder fay, are about the same size as wood elves. Gnomes are smaller still, and much less human in appearance. Leprechauns or wee folk are even smaller. Some types, such as pixies and nixies, are almost never seen in their true form.
All fay possess the natural ability to either appear as a humanoid, a particular animal according to the individual fay's personal or tribal affinity, as a plant, or as a theranthrope or phytanthrope, a part-humanoid, part-animal or plant hybrid. They are limited to a certain number of closely-allied fetches, or animal and plant species-forms native to their place of origin. Many fey, therefore, manifest wings, hooves, horns, pointed ears, scales, fins, claws, bark, leaves, flowers, roots, vines, or other parts when such are useful to them.
At a certain point in a fay-touched character's life and magical learning, he gains an alliance with a fay companion of a level lower than or equal to himself, who almost always remains in full animal or plant form.