Fairies are the fallen angels. Fairies were among the angels loyal to Lucifer. They were cast out of heaven with him to plunge into hell, but suddenly God stopped them in mid-flight and condemned them to remain where they were. Some were in the air, some in the earth and some in the seas and rivers. Such belief is widespread in fairy lore of Ireland, Scotland, and Scandinavia.
Fairies are nature spirits.
Somewhat analogous to the fallen-angel theory, this theory holds that fairies are among the many spirits that populate all things and places in the earth. Fairies are diminutive human beings. There is evidence that small-structured races populated parts of Europe and the British Isles in the Neolithic and Bronze Ages, before the spread of the Celts. In Ireland, they were known as the Thuathe de Danaan. They resided in barrows and in shelters burrowed under hills and mounds.