So, back more on topic.
What would this base fey race look like? It's genetics (and I use that term loosely) would have to allow for radically wide variations in appearance and build as "ethnic groups"/ races (in the non politically correct terminology). It would have to have a variety of features, or no features at all. This is the basis of Castle Falkenstein's fey folk.
Check the Italicized part. Also, do not get "hung up" upon the whole seelie/ unseelie thing or the references to Castle Falkenstein geopolitics.
Faeries come in all shapes and sizes, from tiny brownies to massive ogres, from the ugliest goblins to beautiful nymphs and dryads. Most of the supernatural creatures of fairy tales were faeries of one kind or another -- Rumplestiltskin is a well-known example, the giant from Jack and the Beanstalk is another. Very few, however, have reason to move in the circles of High Society. One exception are the Sidhe, who are the aristocrats of the Faerie world, known commonly as Faerie Lords and Ladies.
Faeries are also divided into two camps -- the Seelie and Unseelie. The Unseelie are Evil. Full stop. Not just nasty, or mischievous, but evil. They bear humanity an undying enmity, and seek constantly to corrupt and destroy humankind. They are prevented from doing so because of the terms of an ancient Compact to which they agreed upon entering this world (tricked into it, some say, by the Sidhe). By the terms of this compact, they agreed not to use their powers to destroy humanity. The Unseelie abide by the letter of this Compact, but not by its spirit. They use their supernatural power to encourage humanity's baser instincts, and delight in tricking humans into destroying themselves. It has been said that the Unseelie are behind many of the worst wars and atrocities that have plagued the world, and most recently that their help was essential in Prussia's rapid rise to the first rank of world powers. The relationship between Bismarck and the Unseelie following Prussia's' defeat by the Bavarian Luftmarine, however, is unclear, especially in light of the Iron Chancellor's recent adoption of a diplomatic policy over his traditional love of blood and iron. Still, individual humans should beware. The Compact defends Humanity, but should an individual human attract the malevolent attention of powerful Unseelie enemies, his fate could be most dire. Humans have been known to drop dead from exhaustion after a night's pursuit by the terrors of the Wild Hunt, or to plunge themselves and their entire families into ruin pursuing some will o' the wisp (literal or figurative) conjured by venomous Unseelie.
If the Unseelie are evil, it should not be thought that the Seelie Faeries are angels. They have standards of behavior and morals that can diverge quite startlingly from human norms. While it is true that a friendly faerie can help a person tremendously, offending a faerie can be both a confusing and dangerous experience.
All Faeries possess certain powers. Because they are not corporeal beings in the strictest sense of the term (more on this below) they have more control over the material of their bodies than humans. Some can dematerialize, others fly, still others change their shape and appearance. Additionally, faeries have certain special powers depending on their race -- brownies can perform prodigious feats of household labor, sirens have voices of supernatural beauty that can lure sailors to their doom, banshees can howl such howls as leave men cold and dead.
Still, the Faerie are not omnipotent. Indeed, they have several important weaknesses. Perhaps most importantly, they are incredibly sensitive to iron, which is inimicable to their beings. Cold iron (that is, iron from space, such as arrives on earth borne by meteors) will strike them dead with a blow. Even ordinary steel will deal blows twice as severe as it deals to humans (i.e., double damage from all weapons of iron or steel). Even large quantities of iron or steel can make faeries uncomfortable -- traveling on a train can plunge a faerie into a nausea equal to the worst seasickness. Perhaps more subtly, Faeries are Not of This World, and while this conveys to them several advantages in terms of special powers they possess, it also conveys several disadvantages. As mentioned above, faeries are not fully corporeal beings in the human sense. They originate from "beyond the veil" in a dimension other than our own, where they exist as incorporeal entities. Because their own world lacks material existence, they do not have our instinctive understanding for both the rules and possibilities of corporeal existence. More importantly, they rely upon our world to provide shape and structure to their own, by serving as a model. The Unseelie deeply resent this of our world, and their resentment has turned to unabiding, irrational hatred. The Seelie understand the important links between their kind and ours, and seek to perpetuate it.
Because the Faeries do not possess our instinctive understanding of the material world, they lack what we would call Creativity. They are bound, or bind themselves, to very rigid traditions and models of behavior. These may take many forms, and are usually shaped by the particular Faerie's understanding of the material world. Thus, Rumplestiltskin was forced to yield when his true name became known, and brownies work for bread and milk, not for silver and gold. More generally, faeries lack the ability to create for themselves -- they must rely on the material world to give order and meaning to their lives.
All in all, this makes for individuals without much scope for player initiative. There is one exception, though -- the Sidhe, who are not fully Faerie. Faeries have always taken human lovers -- dryads seducing woodsmen or, more sinisterly, dark Unseelie lords luring innocent maidens to their doom -- and as a consequence, the blood of the Sidhe (both Seelie and Unseelie) has become mixed over time. Sidhe look like the "elves" of fairy tales -- tall, slim, and elegantly beautiful. Their mixed blood has resulted in certain weakening of the Faerie powers, but it does also give the Sidhe a more instinctive understanding of the rules and potential of material existence, an thus allows them more creativity than their more pure-blooded faerie cousins who are tied to trees or streams or the beck and call of whoever fulfills some obscure and strange set of conditions. Players who wish to play a Faerie character will play Sidhe. Still, as mentioned above, Faerie characters are subject to approval by the GMs.