This is the generally accepted mythology of the origin of thinking peoples. (Yes, this is heavily drawn from the Heroes of the Feywild resource by WotC.) A further comment – this is the creation myth. Of course, it’s D&D, so I need to account for Clerical spells …
In the beginning, there was Day and Night – twin sister goddesses. Day was embodied by the Summer Queen, Tiandra, and Night by the Winter Queen, Firosa. They lived in diurnal/nocturnal harmony, until a third primal figure appeared – the earth, embodied by the Green Lord, Oran. Oran was wild, and wooed them both. Of course, there was disharmony as each sister vied to be Oran’s one and only. In the meantime, however, each lay with Oran multiple times. The children of Tiandra became the Seelie Arch-fey, and the children of Firosa became the Unseelie Arch-fey/fiends. It’s worth noting that the creation mythology of each of these branches portrays the other branch as the “evil”, with a clear sense that they are right and proper. So, orcs think of themselves as living the life that the gods set for them, and it is “right” by them, it’s just that it’s exceptionally cruel and brutal thru the lens of 21st century Earthlings. So the Seelie think they are “right and just”, and so do the Unseelie. This situation does not stem from an intrinsic evil of Firosa or good of Tiandra, as those entities are essentially above those concepts.
The results of their warring were great animosity between their children of light and shadow. Ultimately, a peace was brokered by Oran spending half the time with Tiandra and half with Firosa, thus creating summer and winter, and the transitions between them.
The Arch-fey children of Tiandra and Firosa became the first rank of supernaturals that drive various forces on the material plane. The actual Archfey/fiends are detailed below. The three prime gods (Tiandra, Firosa, and Oran) are very remote and don’t really have much in the way of direct worship. Almost all of the core supernatural “jobs” – calming seas, growing crops, success in battle, and fortune – are handled by the Archfey/fiends of the first rank, both fair and foul. These first rank Archfey (which mechanically look like archfey, celestials, and fiends in D&D) are the ones that involve themselves in the material world, mostly through points of overlap between the Feywild, Shadowfell, and the material plane.
Creation of the Races
The first rank Seelie and Unseelie decided to create “children” to populate the Prime Material. Some of these children are very close cousins (i.e. Humans and Halflings, or the Goblinkin) and some are from different origins entirely (i.e. Gnomes or Orcs).
The children of the Seelie were the Eladrin and then Elves. Then the humans, halflings and gnomes.
The elves that abide in the prime material plane (mostly in Argiliath) are very long lived (but not immortal) and have only had a few generations there. They are not Eladrin, and are a “diminished” form from Eladrin and are therefore no longer Servants of any rank.
Humans and Halflings are essentially just variations on the same species.
The children of the Unseelie were the goblinkin, orcs, and other sentient humanoids. Dwarves are pretty mysterious about their origins, but it’s thought that they were the children of an Unseelie that wasn’t evil, just selfish and greedy about treasure.
Dragons are really just lesser celestials/fiends, that can grow to be not so lesser after all!
Giants were actually fey of significant rank, but decided to dwell in the Prime Material plane, and lost their super-natural-ness – like the elves. The most powerful giants (Storm, Cloud) are still revered as quasi-gods. The next rank, Fire, Frost, and Stone, are nearly elementals, and are degraded from their original might, but recall the stories of their greatness, fueling their resentment. Hill giants (along with Ogres and Trolls) are simply further debasements of the line. They are the most brutish, shortest lived, and (unfortunately) more common.