Here's both how I use the Feywild and how elves relate to it:
- The Feywild was first inhabited by janni (a kind of genie not tied to any Elemental Plane) immigrants who eventually became bound to the plane's magic and reincarnated as the first Archfey.
- Several of the Archfey, especially the members of the Green Court and the Coral Court, established a partnership with the godlike nature spirits of the Material Plane known as the Great Elders. The fey would take on most of the active role of representing and protecting nature while the spirits conserved their strength in case of greater threats, such as the intrusion of a demon lord.
- The nymphs created many of the various fey races with the cooperation of the Great Elder Spirits, including the satyrs, centaurs, harpies, and dryads. Their final creations were the eladrin.
- Eventually some eladrin would emerge from the Feywild to explore the Material Plane. Those eladrin who had children outside the Feywild were the parents of the first elves.
- Some eladrin and elves also had children with the major inhabitants of the Material Plane at the time: the genasi. Curiously, though, the children of elves and genasi were less attuned to magic than their parents, with the descendants losing even more magical affinity. In this way the half-elves came into existence, as well as the humans.
- The humans quickly became known to the fey as a threat, primarily because of their explosive population growth. The wood elves in particular were harmed by the destruction of their forests in mere centuries by the endlessly multiplying humans. Many of the fey began to war against the humans, led by both a mysterious being called the Spinner of Shadows and a malevolent Great Elder Spirit known as Whisper.
- At present the human civilizations try to be civil with the Archfey in exchange for access to powerful magic. While the eladrin and many other fey thrive in the Feywild, the elves and fey of the Material Plane have been largely overwhelmed. The only remnants of many elven clans are the faint traces of elven blood within the humans who eventually gained control of their territory. Most elven communities in the Material Plane are in remote, heavily-guarded enclaves that ban human visitors.
- The drow, who live in the Underdark and therefore didn't have to compete with humans for territory and resources, have no quarrel with them. The drow are a peaceful folk who revere the Great Elder Spirit known as Fate Weaver. There are more drow than there are all other non-eladrin elves combined, and most half-elves are of drow ancestry.