The Fey are the offspring of mortals and immortals, the Taurethar. They have in their lineage the blood of gods, celestials, or more nefarious demonic outsiders. There are only three noble fey bloodlines in Aeriador, known as the Three Noble Fey Houses in Aeriador, but there may be other ‘lesser’ Fey not counted among the three noble lines. The first noble line began with Aeredhel, the first Fey in Aeriador. Aeredhel is the daughter of Faeryl, Goddess of Forests and a Queen of the Taurethar, and Arothir, King of the Green Elves. The second line was from Nienna, daughter of Miriel the daughter of Finduilen and Selene, and Amandil, King of the House of Belor and all Danemar. Nienna was a Fey'dan (Celestial/Human), and she was the second Fey in Aeriador. The third line is from Eärmin, the first Fey'ri, a descendant of demonic and elven blood. Her daughter was Idril, and through Idril came Elwing, and Elwing's children, Ithryn and Indis. These are the three major lines of noble Fey in Aeriador. There may be other fey of lesser stature and nobility, but they are not known and rarely come into any stories. ** Fey is a bloodline heritage, not a racial classification. Not all Fey are in-game Celestial Natives (Aasimar's or Tiefling's). For example, Ithryn and Indis, brother and sister of the same parents, are both considered Fey'ri, but Ithryn has tiefling stats where as Indis has elven stats by race. Ithryn and Indis are 82% elf, 12% human, and 6% demonic celestial outsider, therefore, they each could take the in-game statistics of an elf, half-elf, or celestial native (aasimar/tiefling). For the purpose of “bloodline”, any character/npc with 80% of a race can be considered “full blooded” for that race both in world and for in game statistics.
In-game racial statistics can be any classification so long as the character/npc has a percentage that would warrant it.
As a point of comparison, in dungeons and dragons, a character is considered half-elven (half-orc, etc), only if they are 50/50 of each race. The offspring of two half-elves is a half-elf. The offspring of a half-elf and an elf is an elf, and the offspring of a half-elf and a human is a human. In Aeriador, it is more complex than that, and the choice of game related statistics can be chosen by the player so long as the character bloodline and backstory support it (ie. a person with 5% elven blood could not be half-elven, but a character with 25% elven blood could take half-elven if the player chooses to).