I wanted to make elves and fey different than just humans with pointed ears, so I did two things, I made them lawful and made the importance of the law vrs chaos axis more important than good vrs evil. This seems to make the actions of various elves and fey strange enough to not match up with humans and even give some reason for distrust.
They are lawful because their lives are completly guided by sets of rules and traditions that they follow. These rules and traditions are convoluted and often have no meaning to humans so they can seem chaotic, especially if they have no knowledge of what the rules may be. A human may befriend a fey and everything will go great until at some moment, the fey will turn on him and attack. To the human it seems chaotic, but in reality, the human accidently made a mortal insult to the fey due to some rule that he had no knowledge of. Since, according to the rules, ignorance of the rules is no excuse (because if they don't know the rules, they must be of chaos), there is no real leway given to those who breech them. However, a human who knows a little of the rules, can interact with them fairly safely, at least in certain situations, such as going to the Fey Market.
Fey and elves, being originally created to combat chaos in the form of Lovecraftian gods and their servitor races, value law more than good. This is pretty much the opposite of how human society functions many times where two good people can work together despite one being lawful and another chaotic. In the fey and elven cultures, good and evil are seen as personal choices and do not come into play much inrelationships as long as things follow the rules. A good elf may regret having to commit an evil action if that is what the law commands, but law is seen as the more important driving force in the grand scheme of things (similarly, evil elves may be required to commit good actions).
The unseelie are the fey and elves that have become unlawful (choatic or neutral). Some have given themselves over to darker gods while other simply value freedom. It would probably include any elf that grew up in human culture and followed their ways. it also includes some elves who desire to follow law but when finding themselves in a moral catch-22, declare themselves unseelie and leave their society because it would be the only option left open to them. Unseelie are typcially hunted and killed by the seelie to protect the world from the forces of chaos.
