This is the point, actually.
What I'm doing here is stealing a page from the old legends and lore about the fair folk. See, the average person didn't worship them as deities-- but there were certain rules about how to deal with them. The Fair Folk, or Fey Folk, as well as being perceived as capricious pranksters, were perceived as proud, demanding, and sticklers for courtesy and etiquette. Leave out a saucer of milk for them as tradition demanded, they would favor you. Offend their sensibilities in some fashion and they would take their revenge on you--- with anything from nasty pranks to outright cruelty and curses.
The goodwife is the first evidence of a common misunderstanding about the Rac Cona Daimh..... because they have luxcraft-- "magic"-- they're believed to be of the Fey Folk. Apparently of the Seelie court, as the good family would have been fleeing in terror from the Unseelie.... but unsettling nonetheless.
As to the farmer's notion of going to the Duke, it's not necessarily malice on his part. Imagine what your first notion would be if a little green man from Mars took a nap in your barn. You'd want to be socially and scientifically responsible, and also possibly do what was best for your own kith and kin financially... even if you had no reason to believe the little green man was any danger, you'd be motivated to report him to the proper authorities or at least the local news station, just to be responsible.
"What was that popping noise ?"
"A paradigm shifting without a clutch."