I must first admit that this particular subject is by far the least understood by me than any I will post on here. In fact the fay are the least understood entity by anyone as I will explain shortly. In fact this particular post will also be shorter than any other as well because of that. Let's begin.
Fey are generally recognized as those cute little naked beings that fly around with butterfly wings. This is one manifestation of a plethora of intelligent beings.
As has already been pointed out on another post, kelpies are also a type of fey. Along with bogies, bogarts, leprechaun, pixies, dryads, elves, jenny green teeth, raw head & bloody bones, & a host of others.
However there is one thing they have in common. They have the ability to cast "glamour".
For those who do not not know, glamour is the ability to make something look, feel, taste, smell, or sound any way they please.
They are masters of illusion & are very dangerous because of this. They also seem to have a very hypnotic influence on us when they want to use it. Also because of this there may in fact be only one type of entity that manifests in all these different guises!
Although something is known of their powers not much is known about them as an entity. The few things that are known is that they are obviously non corporeal with highly developed astral & etheric bodies. They are also intimately connected with nature.
Fey are most probably a type of specialized nature spirit that seem to have wills of their own, unlike most elementals. This also makes them extremely dangerous.
although they really don't interact with man very often today, there is evidence from old folk tales that they did at one time. Tales of men taking fairy brides, babies being stolen from their cribs and replaced with changelings, brownies helping people out with their chores, etc.
Like elementals they seem to be amoral especially so when it comes to matters of sex. They do seem to have a general code of conduct when it comes to how people treat the environment or people of who are very spiritual or kindely. Generaly treating people with like attitudes. In other words if you treat the environment with respect they treat you with respect, if you are very spiritual they are likely to be favorably disposed to you if you encounter them or at least not molest you.
On the other hand you have fey that react negatively to you no matter what. This is one indication of free will.
One thing that seems to occur fairly frequently is that sometimes when fairy folk are seen, strange lights in the sky often appear. This may be a connection with the current U.F.O phenomena.
There is also an eerie conection between some of the features of fey and "greys". For example the solid black, almond shape eyes some fey are said to posses, pasty skin, sometimes though not always their very short or very tall statures. Strange mettalic clothes, the need to capture human beings for whatever purpose. The coincidences are quite startling.
Once again because of their ability to use glamour it's difficult to tell if they are one & the same. My personal belief is that there is a connection, but it is only that, a belief.
They have all the same powers attributed to elementals as far as the ability to know your deepest thoughts, tell you your past, etc. that I mentioned in the post on those beings. As I said before though, all beings of the astral realm have those powers to a lesser or greater degree.
Even though there are rituals for ceremonial magick to command a fey to do your bidding, they are some of the most hazzerdous operations of all. Because they are intellegent, because they are master's of illusion, & because they have such control over the astral they are not safe to evoke in the slightest.
There's not much more I can say, perhaps some of your questions will jog my memory or let us explore other possibilities.
I hope this has helped & I apologize for being somewhat ignorant on this subject.
Seek the truth & do not decieve thyself with falsehoods or thou shalt never learn