Fey - Small & Not Necessarily Good

Many Fey beings are on the smaller side. Beings such as the Pixies, Nixies, Brownies, Redcaps, and the like. They are either linked to to Feywild, Seelie Court, Unseelie Court or rumour has it a Dark Feywild. They all come from a time of Earth that magic was stronger in the world and the walls thinner between both it and the worlds of the Fey. This allowed the creatures to come and go easily between both worlds, and in the case of Elves, to travel from places like Alfheim, to Midgard, and then to the Feywild.
The Feywild, like any world, life formed out of the primordial version of it, and flourished, and after a while the magics that seeped this place coalesced into certain forms, and affected the growth of others. Also, this allowed different outlooks to form, with the Fey & Dark Fey splitting into two factions. This led the Dark Fey to be pushed out into regions of the Feywild that took after their own outlook, becoming places of negative magical energy. When the gates, so to speak opened, and mortals from the Material World glimpsed and travelled to the Feywild, the Fey latched on and travelled back with them into the Material Plane. Many took up residence in the wild living in tandem with the ebb & flow of nature, and nurturing life, while others fed of the negative, such as playing cruel pranks on mortals, living in decaying or harsh conditions, taking the lives of mortal creatures, to name but a few.
Humans especially, are aware of the Fey and see them as capricious beings given to good and evil in equal measure. They are viewed as being part of nature, and where possible either avoided, appeased or both in equal measure. Most human cultures have stories of the 'Little People' and they vary from culture to culture. Many humanoids have similar stories, and some are descended of beings originally from this dimension or been touched by them in the past.

"Never trust truly trust us, the Little People. Despite many being peaceful we'll still happily play 'mischievous' pranks that appear malicious to some. Especially to those who have wronged us. And we never forget.... especially since we have long lives we have to pass our time some how."
Alfre the Pixie talking to Grimmaz Fyrwin.