All the standard dictionaries–with the notable exception of the OED–seem to trace the etymology of fairy through Old French fae to Latin fata, meaning "the fates" or "the goddess of fate". As a classical languages major with primary focus on Latin, I find this etymology of fairy doubtful. I can buy the origin from French, but the French connection to fata seems strained.
I'm familiar with the apotropaic "fair folk" being used in place of "fairy," but am inclined to think that this usage is based on an incorrect folk etymology that assumes fairy comes from fair, which in fact seems to be unrelated, coming from Teutonic sources.
The OED traces to Old French in the same way, but–interestingly to me–does not trace further.
Would anyone be willing to explain how fata would be transformed into fae? Thank you!
Best Answer
According to Wiktionary, Galician, Catalan and Occitan have a word fada "fairy" and Italian has fata with the same meaning, which seems like a clear confirmation of a Vulgar Latin form *fata meaning "fairy". (And as tchrist points out, Spanish has hada, because it had a historical change of /f/ to /h/ in many contexts.) I don't know if there are any alternative explanations for this aside from a derivation from Latin fatum/fata.
The phonological development from fata > French fée is quite straightforward: intervocalic t was lenited and lost in French, word-final a was turned to schwa, represented by the letter "e", and stressed "a" was in many circumstances fronted and raised in French, here to /e/ "é", similar to the development of the past participle suffix "-é(e)" from Latin -ātus/-āta. (There are alternative spellings, some of which may correspond to slightly different vowels.) There are many other examples of these sound changes; e.g. Fr. chaîne < Lat. catena also shows the loss of intervocalic "t" and change of final "a" to "e".
I'm not sure how to explain the semantic development but it doesn't seem too far-fetched to me.
As you can see in the OED entry, the -ry part of fairy comes from the -ery suffix; French faerie/faierie/farie/féerie was an abstract noun referring to magic or the realm of the fairies, which seems to have developed in English into a collective noun and then finally the current singular meaning. The OED records earlier uses in English that were closer to the sense of the French word: