@Eltab and
@Tonguez you are correct. It is darkwood in that sense.
The head of the lumber company is evil with a capital E. The company owns pretty much everything in town, he grinds his workers down to dust, and pays them in company script after altering their work records. Can't work? Then you lose your company owned housing. Also, his wife disappeared under mysterious circumstances. The story around town is that she moved to a nearby city to be with her family but hasn't written to her friends in town or sent for her son in years. SUSPICIOUS!
The players have extended family in the group that lives in the darkwood forest. So I think that, regardless of how it is presented, they're more likely to side with family than the town. They claim they were there first but the lumber company has paper that says they own the land.
The schism in the fey was caused by the necromancer I mentioned in the first post. He corrupted a fey artifact and used it to grow flowers whose pollen caused the fey and mortals alike to go into a blind rage. Think along the lines of Poison Ivy from Batman. The PCs were able to develop an antidote for it and stopped it from spreading in the town but many fey were already infected. His plan was that if the two groups were too busy fighting each other, then no one will notice him digging in the old dwarven ruins. Now the fey are split on what to do with all these mortals in their lands and an old rival to the faerie queen makes her play.
ominous music In fact, this necromancer has been behind a lot of the troubles in the area without even trying!
The party has been grumbling about the lumber company for some time. Really what I'm hoping for, as the DM, is to force the coming conflict and for it to be memorable. One thing I am considering is to make the party choose between saving their family and friends in the forest and stopping the head of the lumber company from escaping. But they've shown a willingness to split the party and I'm not sure how that would go down.