PLEASE don't read DJ Conway! Her historic research is non existent. Her "Celtic Magic" and "Norse Magic" books are nearly carbon copies of one another, and neither has anything to really do with the Celts OR the Norse.
Here are good links about the Fae:
http://www.sacred-texts.com/neu/celt/tfm/index.htm
http://www.geocities.com/TimesSquare/Metro/6804/LilladarianShakespeare.html
http://www.pitt.edu/~dash/folktexts.html
http://www.accd.edu/sac/library/faculty/chp/FOLKLORE.HTM
The word 'faery' is a general term for any nature spirit. Some live in the astral plane, others in the physical plane. The stereo-typical fairy is traditionally called a sylph and I think it was renamed fairy from the fact that it's an 'airy spirit' and an 'f' was added in after hearing the word 'faery' during the scientific revolution but not seeing its actual spelling. By the way, Conway's books are usually alright but I'd the best by far is her magickal, mystical creatures book. That has a HELL of alot of fact in it.
the word "fearie" comes from "Fae" meaning "fate" (or destiny) and is beleived to have been first used by the Northern Tribes as a title to describe the three "Wyrd Sisters" who sit beneath the world tree and weave the destiny of man.
but the legends and stories of the little people span back into all culture right back into the history of all lands.
Some think that they are Nature Spirits (elementals) that protect,guide the forces of Nature.
others have said that they are a race from the Otherworld who cross into this realm to help (or hinder) our lives
one legend speaks of an lost race that came to the shores after their land sank into the ocean where another says they may of beeen the caveman like people that lived in the Britsih Isles before the celts settled there.
wherever they came from or who they are what is sure is that our ancestors beleieved in them very much and respected them alot.
Faes come in various sizes and are spirits of nature. Most of them I think inhabit their realm of the astral plane they call "Elphame" only because nature on this planet is declining as modern industry conquers it, but quite a bit still inhabit this planet. The wonder I've always had is about the possibility of alien faeries inhabiting the nature of other planets.
WE do still inhabit this plane greatly. Though my kind avoid major cities as much as possible as was mentioned earlier for one reason. Our allergy to cold iron. It is tolerable for a little while but becomes increasingly more painful the more we are around. We are not all little pixies with butterfly wings. Some of us are as tall or taller than humans. If you have questions just message me.