Fairy (n) - Tiny flying woodland humanoids of European folklore and about as far away from head drilling as I can get. The word in Old French, faerie, moved to English unchanged except for later simplified spelling. There is no relation to the word fair.
The origin of fairies depends upon which wizard you ask. The Gaelic believe that fairies are spirits of the dead. Alchemists and astrologers thought they were elementals, spirits of the air. Some describe them as fallen angels, others as demons. Celtic tradition says fairies are a separate race of people driven into hiding by the advent of man.
J. M. Berrie of Peter Pan fame said that "…when the first baby laughed for the first time, its laugh broke into a thousand pieces, and they all went skipping about, and that was the beginning of fairies."
In 1917, two English girls from Cottingley claimed to have photographed fairies in their garden. Sir Arthur Conan Doyle saw the photos a year later and immediately declared they proved the existence of fairies. The photos were fakes, although Doyle never figured that out. But the girls, while finally admitting the fakes in 1983, claimed to the end that they really did see fairies and that the photo shown here is, in fact, genuine. (More from the Museum of Hoaxes)
It's not hard to find people who continue to believe that fairies are real.
The art at the top is Midsummer Eve (1908) by Edward Hughes.