The Collaborative International Dictionary of English v.0.48:

Fairy \Fair"y\, a.
   1. Of or pertaining to fairies.
      [1913 Webster]

   2. Given by fairies; as, fairy money. --Dryden.
      [1913 Webster]

   Fairy bird (Zool.), the Euoropean little tern (Sterna
      minuta); -- called also sea swallow, and hooded tern.


   Fairy bluebird. (Zool.) See under Bluebird.

   Fairy martin (Zool.), a European swallow (Hirrundo ariel)
      that builds flask-shaped nests of mud on overhanging
      cliffs.

   Fairy rings or Fairy circles, the circles formed in
      grassy lawns by certain fungi (as Marasmius Oreades),
      formerly supposed to be caused by fairies in their
      midnight dances; also, the mushrooms themselves. Such
      circles may have diameters larger than three meters.

   Fairy shrimp (Zool.), a European fresh-water phyllopod
      crustacean (Chirocephalus diaphanus); -- so called from
      its delicate colors, transparency, and graceful motions.
      The name is sometimes applied to similar American species.


   Fairy stone (Paleon.), an echinite.
      [1913 Webster]

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.
      [1913 Webster]

            The God of her has made an end,
            And fro this worlde's fairy
            Hath taken her into company.          --Gower.
      [1913 Webster]

   2. The country of the fays; land of illusions. [Obs.]
      [1913 Webster]

            He [Arthur] is a king y-crowned in Fairy. --Lydgate.
      [1913 Webster]

   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.
      [1913 Webster]

            The fourth kind of spirit [is] called the Fairy.
                                                  --K. James.
      [1913 Webster]

            And now about the caldron sing,
            Like elves and fairies in a ring.     --Shak.
      [1913 Webster]

   5. An enchantress. [Obs.] --Shak.
      [1913 Webster]

   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.
      [1913 Webster]

            No goblin or swart fairy of the mine
            Hath hurtful power over true virginity. --Milton.
      [1913 Webster]

WordNet (r) 3.0 (2006):

fairy
    n 1: a small being, human in form, playful and having magical
         powers [syn: fairy, faery, faerie, fay, sprite]
    2: offensive term for an openly homosexual man [syn: fagot,
       faggot, fag, fairy, nance, pansy, queen, queer,
       poof, poove, pouf]

Moby Thesaurus II by Grady Ward, 1.0:

95 Moby Thesaurus words for "fairy":
   Ariel, Befind, Corrigan, Finnbeara, Mab, Oberon, Titania, air,
   auntie, banshee, bi-guy, bisexual, brownie, bubble, bull dyke,
   butch, catamite, chaff, chicken, chip, cluricaune, cobweb, cork,
   down, dust, dwarf, dyke, elf, elfin, elfish, elflike, ether, faery,
   fag, faggot, fairy queen, fairyish, fairylike, fay, feather, femme,
   flit, flue, fluff, foam, fricatrice, froth, fruit, fuzz, gnome,
   gnomelike, gnomish, goblin, gossamer, gremlin, gunsel, hob, homo,
   homophile, homosexual, homosexualist, imp, invert, kobold,
   leprechaun, lesbian, mote, nance, ouphe, pansy, pathic, peri,
   pixie, pixieish, pooka, puca, puck, punk, pwca, queen, queer,
   sapphist, sponge, sprite, spume, straw, sylph, sylphid, sylphidine,
   sylphine, sylphish, sylphlike, sylphy, thistledown, tribade



The Devil's Dictionary (1881-1906):

FAIRY, n.  A creature, variously fashioned and endowed, that formerly
inhabited the meadows and forests.  It was nocturnal in its habits,
and somewhat addicted to dancing and the theft of children.  The
fairies are now believed by naturalist to be extinct, though a
clergyman of the Church of England saw three near Colchester as lately
as 1855, while passing through a park after dining with the lord of
the manor.  The sight greatly staggered him, and he was so affected
that his account of it was incoherent.  In the year 1807 a troop of
fairies visited a wood near Aix and carried off the daughter of a
peasant, who had been seen to enter it with a bundle of clothing.  The
son of a wealthy _bourgeois_ disappeared about the same time, but
afterward returned.  He had seen the abduction been in pursuit of the
fairies.  Justinian Gaux, a writer of the fourteenth century, avers
that so great is the fairies' power of transformation that he saw one
change itself into two opposing armies and fight a battle with great
slaughter, and that the next day, after it had resumed its original
shape and gone away, there were seven hundred bodies of the slain
which the villagers had to bury.  He does not say if any of the
wounded recovered.  In the time of Henry III, of England, a law was
made which prescribed the death penalty for "Kyllynge, wowndynge, or
mamynge" a fairy, and it was universally respected.