>>13078682The way I see it, fairies were responsible for dispatching EVIL (Dark type/Evil type) creatures and villains in some stories and folklore, such as the stated dragons. (Dragon type). In a battle they used magic, which could easily beat an unarmed warrior, much like how Psychic attacks are also supereffective against Fighting. They also weren't exactly pure good, they were more tricksters. The above Psychic/Fairy vs Fighting thing, plus fairies being tricksters in contrast with Fighting type's hero/justice connotations causes that.
As for weaknesses, a little fairy could be easily beaten by an armed warrior, with a sword or gun. (Steel). Also, fairies are shown as creatures tied closely to nature. Poisoning and killing nature and plantlife could harm or kill a fairy, such as tree nymphs (dryads) from greek myths.