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The word 'Fairy' is most commonly used to describe a mystical entity that holds no true connection with our physical world. Because of this non-connection, the word "Fairy" has a neutral connotation and is used to describe the powerful forces of nature and the mystical entities that inhabit nature. It is likely that because old Pagan religions are deeply entangled with the forces of nature, the term "Fairy Tales" came naturally to describe stories of mystical encounters in the forests during that time. The modern interpretation of a "Fairy" has evolved to something that is still evolved with the forest but is far from what the original historical context suggested. Think... mysterious weather and swirling clouds (old pagan view of "fairies") vs.. Tinker Bell (modern interpretation of "fairies")