The book, like Changeling, uses faerie myth and folklore, particularly that of Ireland, as its source material, but reworks it into a whole world for players to inhabit.
Differences between the fae began to develop early. There are three basic types in the game: the firstborn, sprung full-grown from the Mists; the inanimae, who formed from the interaction of the mists with the natural world (who resemble elemental nature spirits); and changelings, who may be either human children raised in faerie, or fae children raised by humans.
They are further divided by courts, which are their basic philosophies which guide their reactions to the world around them. The Spring Court is a fractious gathering that values change as an ideal in itself; the Summer Court holds traditionalists with high values of honor and precedent; the Autumn Court is most interested in learning and study of the world around them, particularly, in these days, humans; and the Winter Court is a loose alliance of monsters and bugbears, creatures that "go bump in the night," and prey on the weak. Solstice Court fae either failed to be accepted into one of the other courts or rejected them, and hold a variety of viewpoints.
When these conflicting points of view arose among the fae, it inevitably led to war. Not desiring to destroy the world, they absented themselves from it to fight their battles, leaving it (temporarily) in human hands. Humans swore Oaths of Gold to them, to hold the lead and act as stewards. After many long years of battle, a truce was declared, and the fae have come back for their lands.
But humans have forgotten their oaths, and are not interested in giving the world back. They have changed and solidified it, and they have gained powerful weapons in faith and religion to drive away the fae and keep these lands. These are called Echoes, and they may take the form of any of the traditional prescriptions against faeries: bells, clothes-worn inside out, iron, crosses, etc.
The fae themselves have mostly forgotten how to make oaths of great power, and are generally reduced to smaller vows with one human or with a small group of them, which serve mainly to protect them against Echoes. Oaths consist of a service or prohibition on the part of the human, a service on the part of the faerie, and a penalty for breaking of terms. Traditional "placating" measures of folklore are the basic inspiration for oaths: leaving cream or bread out and staying out of certain forests are examples. Trangressions by either party are punished harshly.
Fae reactions to this state of things vary; there are semi-political groups favoring, variously, a return to war at the end of the truce, an extension of the truce, a return to a cyclical sharing of power, and study of humans and human powers. These may take into consideration human affairs and their gaining power or ignore them in favor of "more important" issues.
While changeling and inanimae have two faces, one that shows a human side and one that shows them for the creatures they are, the firstborn must rely on the Mists to shield them. Whatever type the fae is, their natural appearance is inhuman in subtle ways... hair, skin, or eye color, features of elements or animals, unusual stature, and other "exotic" touches. These subtle differences are called Lesser Features, and have no mechanical gameplay effect. Greater Features are more obvious (horns; great or very small stature; an entrancing, otherworldly gaze), and do give gameplay benefits. However, they make a fae more susceptible to Echoes.
Fae are brought into faerie society (whatever their origin) first through a Fosterage, as they are cared for in "youth" -- which may or may not be similar to childhood -- and secondly and most importantly through a Saining, which is a ritual in which a fae chooses and is accepted into a Court.