The Origin of the Elves
Once, there was a traveler who lost his way and did not know where he was going. At last he came to a farm, which he did not recognize at all; there he knocked and a mature woman came to the door, and asked him in, which he accepted. All the furnishings of this farm were excellent. The woman led him into the main room, where two pretty young girls were sitting, but he saw no one else on the farm except for this woman and the two girls. He was welcomed courteously, given food and drink, and later shown to bed. The man asked if he might sleep next to one of the girls, and was told that he could. They lay down together and the man wanted to turn towards her to talk, but he could feel no body where the girl was. He caught hold of her, but there was nothing between his arms, though all the while she lay quietly beside him and he could see her perfectly well. So then he asks her the reason for this.
She says he need not be surprised at it, "for I am the spirit with no body," says she. "Long ago, when the Devil raised revolt in Heaven, he and all who fought him were driven into outer darkness. But those who were neither for him nor against him and would join neither army were driven to Earth, and it was decreed that they should live in knolls, hills, and rocks, and they were called the elves, or Hidden People. They cannot live with their people, only on their own. They can do both good and evil, and both in the highest degree. They have no bodies such as you humans have; yet they can show themselves to you when they wish. I am one of this band of fallen spirits, so it is not surprising that you cannot feel me.
The man had to rest content with that, and later told the story of what had happened to him.