I am not sure if the word fairies should be capitalized. I have not tried anything, I'm just confused and want this to be correct.
Proper nouns are capitalized in English. In this world, fairy is not a proper noun and should not be capitalized.
American is a capitalized noun because the word is derived from the proper noun America.
Analogously, fairies should be capitalized if they come from a specific land called Fairy.
On the other hand, if there are a group of species that are fairies, such as elves, redcaps, goblins, etc., then maybe it isn't.
Is Fairy a proper noun in your fictional world?
I think if you are using Fairies as a race name (like Blacks/Whites/etc) then it should probably be capitalized. If you’re talking about fairies in general, like you would say “those white people” or “those black people” without referring to the specific race as a WHOLE, then it would be okay to put it in lowercase.
Let's find out. Merriam Webster is an expert on spelling and capitalization and they say that "fairy" is not capitalized.