I'll note as I begin that I will in this article be using the terms elf and fairy synonymously, as general terms for Otherworldly beings. This reflects the generalized use of the terms in the source material I'm referencing in writing this. For those who prefer to see the terms as applying to specific beings, understand that what follows would then apply equally to both.
That fairies or elves are capable of possessing humans may seem like a strange concept to some people reading this, but it is a power that they were always understood to have until recently. Just as they can influence a person's perceptions through the use of illusion - glamour - they can also directly influence a person's mind by bringing madness or even by displacing the spirit and taking over control of the person's actions. Effectively what we in modern terms would call possession, although historically we see a variety of examples of this ranging from voluntary to involuntary, temporary to longer-term. Like the more commonly understood demonic possession however possession by fairies was problematic enough that cures and exorcism rituals for it exist.
Demonic possession and possession by fairies seem to have been understood as different and distinct situations, but they were also seen as somewhat overlapping in nature. Looking at the Saxon evidence we see that cures for elf-possession were found alongside exorcism for demons and in the case of one example found in the marginalia of a manuscript it simply adds the word 'aelfe' into the existing Latin rite of exorcism (Jolly, 1996). The symptoms for elf-possession in the Anglo-Saxon and Saxon evidence however is not what we would in modern contexts associate with demonic possession, necessarily, and is marked by fevers, nightmares, and madness more generally. Madness in these cases was usually described as marked changes in personality, nervousness or anxiety, or significant behavioral changes. This is reflected somewhat in a later Irish anecdotal example of fairy possession from the 19th century which also involved madness. Elves are often grouped with demons and night-hags as beings which both possess and torment humans and for which there are specific prayers, charms, and herbal cures (Jolly, 1996).
There is a specific word for such possession in Old English: ylfig. Ylfig seems to have been associated with possession by aelfe [elves] in particular and had both negative connotations which could require exorcism as well as some connections to prophecy (Hall, 2007). The fact that there was a particular word for this exact type of possession, separate from the word for divine possession [gydig], tells us that it was either widespread enough or understood enough in the culture to necessitate its own vocabulary and that is significant.
In Irish sources there are hints of fairy possession in the mythology, especially in some of the stories of the conceptions of heroes or kings believed to have both mortal and fairy fathers. Depending on how one reads the tales of the conceptions of Cu Chulainn and Mongan it can either be interpreted that the being in question, a member of the Tuatha De Danann who was also at the time among the aos sidhe, physically visited the woman or else possessed the body of the woman's legal spouse*, giving the child, effectively, two fathers. There is also a more clear anecdote of fairy possession in 'The Fairy Faith in Celtic Countries' which describes a girl whose father "held communion with evil spirits" and whose house was built into a fairy hill, who came to be possessed by the fairies and was eventually institutionalized (Evans-Wentz, 1911). After two years of that she was taken to nuns and then to a Fairy Doctor who eventually worked a cure for her.
During the Victorian period some writers favored the idea that changelings* were the result of fairy possession rather than actual physical abduction (Silver, 1999). In these circumstances it is not the child's body that is taken into Fairy but only the soul, and the body left behind is then filled with a different spirit. One source described it as if the child was being overshadowed and displaced by the secondary spirit (Silver, 1999). The symptoms of a changeling then would also be the symptoms of fairy possession, which would be inline in many cases with what is seen in the Anglo-Saxon and European evidence: illness (fevers), nightmares, and significant behavioral or personality changes. By this logic charms to get rid of a changeling and return the human are actually a type of exorcism, seeking to drive out the foreign spirit and allow the original to return; tragically like some demonic exorcisms the possessed person/alleged changeling doesn't always survive the treatment.
Fairy possession is also found in mainland Europe. It is seen among the Romanian Calusari who dealt with a type of fairy called the iele; the iele possessed people as well as teaching those who followed them herbal cures (Purkiss, 2000). In Germany while outright possession is not explicitly described the elben [elves] are clearly connected to both madness and nightmares, two things that are closely tied to the ideas of fairy possession. Grimm, for example, relates that in German there were two closely related expressions for nightmares: "dich hat geriten der mar" [the night-mare has ridden you] and "ein alp zoumet dich" [an elf bridles you i.e. has a horse's bridle on you] (Grimm, 1888).
Involuntary possession by fairies seems to occur most often when a person has transgressed against the Good Folk in some way, although they may not be aware of having done so. It also occurs, looking at anecdotal evidence, to children whose parents have transgressed in some way, as we saw in Evan-Wentz's story and the theory about changelings. It is also possible that such possession can be invited by an individual voluntarily, either as a result of seduction by a fairy or through a desire for prophecy. The Calusari invited possession by the iele through trance dancing (Purkiss, 2000).
Cures for fairy possession in the Lacnunga and Leechbooks ranged from Christian rites of exorcism that included calling for the elf-spirit to be cast out to drinks made from frankincense, myrrh, and shaved agate* (Jolly, 1996). Exorcisms through prayers are common but so are casting out these spirits using salves, drinks, and incense. For example burning the plant aelfthone* soemtimes along with several other herbs, such as bishopwort and lupin, is repeatedly recommended in the Leechbooks. Another, safer, option is 'smoking out' the elf or fairy using mugwort. Smoke was believed to be an effective method to drive the elf out of a person, or as Jolly says "to purge or exorcise the internal evil" although Jolly does also discuss the difficulty of synthesizing "amoral creatures such as elves...into the Good-Evil paradigm of the Christian moral universe." (Jolly, 1996, p 136). Indeed Christianity has struggled everywhere to fit fairies into its paradigm, often settling for an uneasy compromise that places them ambiguously between angels and demons and this may be reflected in the approach to fairy possession, which is itself ambiguous.
Fairy possession is not a subject that is widely discussed in the Western world today, yet it was once commonly understood, enough so that in the 13th century Old English had a particular term for it. Unique from demonic possession, although an overlapping concept, fairy possession was marked by fevers, madness, and nightmares all of which were thought to indicate the influence of fairies on a person's mind and by extension body. Multiple cures existed for this type of possession relying to varying degrees on the aid of an expert, either a priest or a Fairy Doctor. In context it must be understood as something that cannot be clearly labeled as either good or bad, and that can be found in various places as a voluntary practice to gain knowledge from the fairies or elves as much as it can also be viewed as a punishment from them for people who offend them.
*for example in the Imramm Brain Manannán says that he is taking on the shape of a man and that he will be a vigorous bedfellow to Caintigern but Fiachra will acknowledge the son as his own.
*Personally I do not believe that any single theory explains changelings, but rather that there were likely multiple possibilities.
*please don't actually do this. I am in no way advocating the safety of this drink, nor do I recommend it.
*aelfthone is an old name for a specific kind of belladonna. I DO NOT recommend burning this unless you have experience handling poisonous herbs. Burning this herb or consuming it could be extremely dangerous. Do not do this.
Jolly, K., (1996) Popular Religion in Late Saxon England: elf charms in context
Hall, A., (2007) Elves in Anglo-Saxon England
Silver, C., (1999) Strange & Secret Peoples: fairies and Victorian Consciousness
Evans-Wentz, W., (1911) The Fairy Faith in Celtic Countries
Purkiss, D., (2000) At the Bottom of the Garden: a dark history of fairies, hobgoblins, and other troublesome things
Grimm, J., (1888) Teutonic Mythology volume 2