At one time, it was believed that fairies from the woods would come out at night and dance in circles. Science believes that there is another culprit. Fairy rings are caused by a group of underground fungi that are related to the wood-rot fungus. The fungus starts as one tiny spore under the lawn. As it grows, it eats what little organic matter is in the soil.
Fairy rings can occur on any type of lawn.
In addition to the green ring, which may make the lawn look uneven, there is sometimes a bare area either on the outside or inside of the green ring itself. This is caused by either the fungi releasing a temporary toxin, or the mycelial mat itself repelling water. If you take a pick to the edge of the ring, look at the soil clods that come up. This is the underground body of the fungus. Sometimes, but not always, you may see toadstools associated with the ring along the edges.