The Collaborative International Dictionary of English v.0.48:
Fairy \Fair"y\, n.; pl. Fairies. [OE. fairie, faierie,
enchantment, fairy folk, fairy, OF. faerie enchantment, F.
f['e]er, fr. LL. Fata one of the goddesses of fate. See
Fate, and cf. Fay a fairy.] [Written also fa["e]ry.]
1. Enchantment; illusion. [Obs.] --Chaucer.
The God of her has made an end,
And fro this worlde's fairy
Hath taken her into company. --Gower.
2. The country of the fays; land of illusions. [Obs.]
He [Arthur] is a king y-crowned in Fairy. --Lydgate.
3. An imaginary supernatural being or spirit, supposed to
assume a human form (usually diminutive), either male or
female, and to meddle for good or evil in the affairs of
mankind; a fay. See Elf, and Demon.
The fourth kind of spirit [is] called the Fairy.
And now about the caldron sing,
Like elves and fairies in a ring. --Shak.
5. An enchantress. [Obs.] --Shak.
Fairy of the mine, an imaginary being supposed to inhabit
mines, etc. German folklore tells of two species; one
fierce and malevolent, the other gentle, See Kobold.
No goblin or swart fairy of the mine
Hath hurtful power over true virginity. --Milton.