In Celtic Folklore, Elves were related to fairies and could shapeshift.
The first part entered the Forgotten Realms somewhere around 4e, where Elves suddenly had an Eladrin ancestry, which are basically magical fairy people that life in a dimension called the Feywild. Since then, this connection has been deepened even further, with High Elves (Gold, Moon and Star Elves) actually being Eladrin... kind of. Shapeshifting elves are also a thing in FR, with the Lythari being natural born elven werewolves, and the Fey'ri, half-demon elves in disguise.
