[Morthoron]

Interesting that the word 'fey' has its root in the term faery itself (French, I believe, as in Morgan la Fey), thereby insinuating an instability in the Elvish (or, more properly, Sidhe) set in a classical sense. Reading something like W.B. Yeats' or Crofton Croker's folklore of Ireland, it's certainly reasonable to believe that faery-folk are unreasonable and more than a bit daft. They are certainly not a stable race in any case (which is reiterated for modern readers in Mr. Norrell and Jonathan Strange).

I wonder if Tolkien perhaps gleaned a bit of the Elvish feyness from 19th century English and Irish writers. I know he didn't care much for Gaelic mythology (Usnach, Cu Chullain, Redbranch, etc.), but Faery feyness abounds in more current Irish folklore (say, within the last 2 or 3 centuries), and in older tales Tolkien was more partial to, as in the Welsh Mabinogion and the Arthurian cycle as well (The Green Knight was not the most stable character, was he?). I haven't read any George MacDonald in the last 2 decades, but I seem to remember a great bit of feyness permeating his novels.