A/N: A small nugget of an idea I had rummaging around in my head. Not sure if I'll expand upon this in the future, but I at least wanted to get this idea out in the open. Reviews are appreciated thank you. I do not own Fairy Tail.
Once upon a time…
In the lands of Talamhun the fairfolk roamed wild and free. Though they were small, the fairies were the guardians of the land, the living heartbeat of those that resided there. This was before recorded time and knowledge was passed down through story and song. Those who kept the knowledge were held in high esteem and duty bound not only to seek out knowledge, but to share it throughout the lands. What one receives may others graciously partake. Stories say this was a time of unparalleled peace, the fairies knew little of conflict as any disputes could be solved with mediation and truth.
The arrival of Man to their world was therefore met with only curiosity and excitement, there was no reason to think otherwise. Legend has it Queen Mavis, the Child Queen, flew out to meet these newcomers herself and welcome them. Many were families of women and children, refugees from a thing called War, and in a last-ditch effort to save them a mage of great power had created a portal to transplant these people away from War to a land of Peace. The Child Queen could not refuse them after their tales of misery were brought to light and the hearts of those who flew with her broke with the human children's cries. The vast plains of Fiona that day became the new home for the displaced humans and everyone was happy. The humans had been brought to a world of peace, parents no longer had to hide their children from the armies who drafted them for war, no longer feared the roving bandits who pillaged and burned. The fairies too were able to learn many new things from the humans and in addition welcomed a new species to their world. For several years portals would send these refugees through every handful of months. The newcomers were welcomed and fed; their already established human brethren would eagerly hope to see familiar faces and receive word of their homeland.
But as with all new things, time began to take its toll. The humans were incredibly prolific and within only a few short decades the plains were not enough to hold their swelling numbers. The expansion of man soon spread in all directions. No one knows quite how it started, but strife between the species began to unfurl. The dragons, once blood guardians of the fairies, withdrew back to their hills and mountains to protect their nesting grounds. Any human intruders were dealt with fatally. The Exceeds removed themselves from Talamhun entirely and claimed a large, uninhabited, and more importantly, an isolated land for their own. The Celestials permanently returned to the heavens, locking the gates behind them. The fairies tried to keep their bonds with the humans strong. They were, after all, the first beings to welcome the weary refugees. They were the ones who taught these humans the magic of their world. But good intentions and hopeful wishes cannot compare to a people who had grown up, lived, and survived through bloodshed. Queen Mavis, no longer the Child Queen for years past, held herself in isolation for seven days, desperately trying to find a path without bloodshed.
When the queen finally emerged, she had a solution. The fairies would remove themselves from the land and make a new home in the sea where man could not follow. Their bright glittering wings would be traded for shimmering tails. They would no longer guard the creatures of fur and feather, they would be the new guardians for flipper and fin. Many mourned this turn of events, but faith in their queen was great, and the fairies followed their beloved Mavis to the water's edge. With a spell so powerful it was said to blind from miles away, the fairies disappeared from the shore and reemerged in the salty water. No longer fairies with wings, these fairies had tails. Thus, came to be the first of our kind, the merfolk.