because humans are trespassers there, and Dryads, Fey and Elves are in their right to deal with trespassers as they see fit.
People like to talk about how racism in games is realistic or at least provides verisimilitude. In the real world, plenty of humans have decided that the natives of a land are the actual trespassers, ungrateful savages keeping the more deserving people from enjoying the land themselves.
So why aren't there more games like that?
Where city-dwelling humans (and dwarfs, dragonborn, tieflings, orcs, etc.) have decided that they want
that forest for their own purposes--since wood is necessary for civilization, and those forest folk are just a bunch of uncivilized savages--and so are fighting the elves and dryads and fey for it. Being more innately magical, the forest folk have some particularly nasty ways of fighting back. They turn the human (etc.) POWs into mindless animals or plants (be careful when you go hunting in the forest; that deer you kill may once have been a person). They have no problems torturing humans, because humans are mere mortals so it's no worse to them then pulling the legs off a spider is to some humans. They turn normal animals into beasts of war or into spies, so the humans can never tell if that cat or dog or cow is pet/livestock or an enemy. Worse yet, they enchant people, either stealing them away forever and turning them into charmed servants, or returning them with subliminal programming. As the humans encroach further and further into the forest, the forest folk get more and more vicious and vengeful. After several decades or centuries of this the elves have become kill on sight monsters.
It's plenty realistic, for those who care about realism. Neither side is blameless, even if one side started it, and it's been so long since then that who started it barely even matters anymore. It may have its roots in colonialism, but it's a case where the indigenous peoples have equal levels of technology (magic) and so weren't just bowled over by the invaders. The forest folk do horrible things to the good people of the cities and plains, which makes it even mythologically realistic. And the good people of the cities can, in fact, be actually
good-aligned, not just evil colonists who are doing mean things to those poor helpless faeries, because even if humans decided to stop logging and never stepped foot in the forest again, the forest-folk have long memories and hold grudges.
It is
incredibly easy to make a setting where orcs and goblins aren't the default ugly, always-evil, kill-on-sight monsters.