Fairies live on the edge of the forest, deep within the forest, or at the bottom of your garden in the areas that most people don't think to look. They live among the low growing strawberries or near the thistles where humans without gloves don't like to weed.
Fairy houses can be the inside of a hollowed out tree trunk, a grove of shrubbery--often referred to as "The Hollow"--or between the crevices of a stack of rocks. This is why you should never just stick your hand in a hole you find in the woods! Fairies do not bite, but they can paint your hand with liquids that make your skin break out.
To build a fairy house for the fey folk in your own backyard, use all natural materials. Cedar shingles are excellent, or gather up different sizes of stones and arrange them to form a cave. Hide the house well, or the fairies won't come live in it. Putting out a small bowl of sugar or juice will attract the fairies and let them know that they are welcomed and you mean them no harm. If you can hide the house back in tall overhanging grass where you would never mow, so much the better.
Fairies who live at the bottom of your garden love to plant as much as you do. Fairy gardens are tiny, just one seed from each plant that they are cultivating. One onion can last a fairy a long time! But most of the fairy gardens are made up of fragrant flowers. Bluebells, buttercups, and dandelions are fairy favorites.
Providing miniature flowers and shrubbery near the fairy house will give the fairies something to take care of, they like to tinker so. And planting tulips and daffodils right above the smaller garden provides a place for the fairies to sit up high and watch you dig in the garden. While most fairies can fly, they also like little trees to climb and stones to play hide and seek in. with a little imagination, you can give your garden fairies a cool little place to call home. You could come up with some fairy stories of your own.
Another great fairy house is simply to take a terracotta flower pot and set it upside down. Be sure you use real terracotta and not the plastic stuff. You could paint it--using only natural dyes, of course, or check out "Fairy Houses," by Barry Kane for a lot of creative ideas.