Elves and Hidden people

Hidden People of Iceland

Throughout modern day Scandinavia, Ireland, Britain, Iceland and the Faroe Islands there can still be found a great many legends and myths about what may be collectively called “hidden people”.
These are the supernatural human like creatures who exist alongside the human population but are for all intents and purposes, invisible to our eyes. In Iceland the term huldufólk could easily be translated as ‘Hidden people‘, the word consits of the words huldu- pertaining to secrecy and fólk or people, "folk".

The term is commonly used to refer to the elves in Icelandic folklore and was originally taken as a synonym of álfar or elves in 19th century Icelandic folklore.
An avid collector of folklore, Jón Árnason, when traveling around Iceland collecting tales and legends, found that the terms were synonymous, except álfar was used as a pejorative term.
On the other hand Konrad von Maurer contends that the term huldufólk originates as a euphemism to avoid calling the álfar by their real name.

Pagan Creations

Stories of invisible beings that dwell in the landscape have in all likelihood flourished in the pre-Christian cultures of Western and Northern Europe. They are abundant in the British Isles and Ireland as well as all of Scandinavia and Iceland.
Given that the folklore of the Viking Age was largely preserved and remembered through word of mouth scholars agree that only a minute fragment of the mythology from this time is preserved in the medieval manuscripts that have survived into the modern era.
Despite this fact pagan precursors to elves or hidden people can be found in the twelfth century writings of Snorri Sturluson and in skaldic verseElves were also mentioned in the Eddic poems, where they appear to be connected to fertility. We should therefore assume that they played a significant role in the mythology of the time.

Christian influences

These creatures of the land are not only a pagan phenomenon, Christians seeking to explain the unexplainable have also found ways to bring the ancient tales into the Christian fold.
According to one Christian folk tale, the origins of the hidden people can even be traced to Adam and Eve.  It happened after their shameful expulsion from Eden that when God wished Adam and Eve to present their children to him they only showed him their clean washed children. They tried to hide their dirty, unwashed children from the sight of God, and lied about their existence.
God, understandably upset, then declared: "What man hides from God, God will hide from man."
Other Christian folktales claim that huldufólk originate from Lilith, or are fallen angels condemned to live between heaven and hell.

Icelandic elves 

Icelandic elves can be treacherous and untrustworthy, they may trick and harm humans they come across but are very generous if they are helped themselves.
These bad elves are often seen as the unchristian ones, while the good elves are the hidden people. They are completely Christian, going to mass and holding to the sacraments.