Fey was originally an adjective meaning (1) fated to die or (2) with a sense of approaching death, and fay was exclusively a noun meaning a fairy or an elf (fay has the same Old French origin as fairy). Today, the two words have melded into the sense of fey we’re familiar with—namely, fairylike, elfin, or otherworldly. The darker definitions of fey are mostly gone, and the original fay is an archaic variant of fairy.
There are still some who insist the newer sense of fey is wrong—and some dictionaries still list only the old definitions—but the new word is so well established that there’s no sense fighting it.
Examples
In each of these examples, fey means fairylike, elfin, or otherworldly—not fated to die:
… it is no small accomplishment to write a novel that involves a great many sprites, elves, hobgoblins and faeries, but is never once fey. [Scotsman]
… Madeline Wong’s pliant and fey Juliet delicately walks up the crouched backs on one side … [Boston Globe]
I’ve lost interest in Sookie’s world since it became overrun with faeries and other fey beings … [io9]
… and youthful Malcolm, the future king of Scotland, has been transformed into a fey surfer boy with a penchant for showering with his soldiers. [TheaterMania]
This sense of fey has obviously filled a gap in the language, and people seem to like using it. It’s probably here to stay.
