In legend and lore, pixies are mischievous little green fairies, with pointy ears, wear greenish outfits & pointy hats. Some pixies are brown & some have wings.  They apparently are quite the pranksters when they get bored or just want to have some fun with humans.

*I think pixies and most any of the nature folks probably would switch their clothing colors to match the seasons to help them be able to be further camouflaged from human eyes.

A few of the pranking games the pixies play:
Steal horses and ride wildly across the night.
Steal things from humans.
Throw things at humans.
Rapping on windows and walls.
Throwing small stones at walls.
* The most notorious pranking is being ‘Pixie-led’ where the pixies change aspects of the environment to confuse travelers (sometimes in familiar terrain).   Being ‘Pixy-led’ isn’t necessarily confined to confusing travelers, a person can be pixy-led in other aspects of life as well.

It’s thought, you can keep down some of pixie pranking and by leaving them gifts such as cake, honey, milk or other such foods.  The pixies will sometimes appreciate these small gifts as a sign of respect and help with tidying up the house or helping around the farm.

Objects made from Iron are suppose to repel Pixies (and other species of fae & nature folks).  It’s generally thought it’s because contact with the iron harms them.   As iron is a natural element in nature, their dislike for iron might be because of the destructive implements that we humans make from it like plows to tear up the land, axes to chop down trees, guns, knives, war machines, and so on. (Of course the fae and nature folks could have some specific allergy to it like superman & cryptonite.)

The Pixie’s were a tiny people who were masters at metal working in gold, bronze and silver.  They were always covered in metal dust and left sparkles everywhere they walked. Thus the legend of the pixie dust began.
It’s thought that this may be where sparkly appearance came from in art and film.

I was happy to finally read a legend of what pixie dust is and why it’s been such a big part of the genre.

Further Pixie reference:
Pixie-New World Encyclopedia
A Complete Guide To Faeries & Magical Beings by Cassandra Eason
Faeries by Brian Froud & Alan Lee
The Illustrated Encyclopedia of Fairies by Anna Franklin