To begin, nothing I am going to say here is groundbreakingly original. But this is a topic that comes up from time to time and I want to address my own opinions on it, as within the community of people who believe in the Good Neighbours there tend to be a couple schools of thought. Suffice to say that the people who hold the opposite opinion to mine use the exact same evidence but argue the other angle.
So, a question that comes up for those who study fairies and/or folklore is what if any connection might exist between fairies and extra-terrestrials?
Here's my personal opinion on it, given as a personal opinion (so no reams of citations).
I believe that modern stories of aliens and alien abductions are actually fairies and fairy abductions re-framed to fit within 20th and 21st century human expectations. Fairies have been a part of belief and folklore as long as we have written stories from the various cultures we find them in*. However as we have moved, culturally, into the modern and post-modern period fairies have largely in the dominant culture of America become relegated to children's stories and nostalgia. This left a contextual void for people having experiences to use to explain what they were experiencing. This void was filled by fiction and film as popculture embraced the idea of extraterrestrials and our cultural consciousness became saturated by these new stories.
The first aliens appear in fiction as early as 1887 (in a short story titled Les Xipehuz) and in Hollywood in the silent films of the early 1900's; the idea however really bloomed post world war II in both speculative fiction and film. The first UFO sighting in the US is thought to have occured in 1947; the first reported abduction in 1961.
When we compare fairylore and alien and UFO lore we see some striking similarities:
In traditional fairylore fairies are well known to steal people, sometimes permanently sometime temporarily. In cases where people are returned they may have terrifying stories of their experience and may have physical marks. In turn alien abduction stories also feature aliens stealing people sometimes for benign purposes, or obscure ones, sometimes for cruel reasons. The people are returned with nightmarish memories and sometimes physical marks. The Slua Sidhe are noted to lift people up into the sky and they as well as some other types of fairies were said to carry people across the sky or fly with them, returning them later; modern UFO encounters sometimes include people being taken up into alien crafts and carried away only to be returned to earth. The reason for taking people, including forced reproduction, are also consistent between both fairy stories and alien abductions although how the two play out historically versus currently vary.
Time is often noted to move differently in the world of Fairy; so too those who describe alien abductions often talk about weird issues with time. Particularly in Fairy it has been said that what feels like a day there will be much longer amounts of time here and similarly in alien abductions people describe being gone for minutes that were really hours or hours that were really days.
Some fairy encounters, including those with beings like the Mâran, include sleep paralysis and overwhelming fear that occur to a person in their bed. In the same way alien encounters are sometimes described as happening to a person who is sleeping and wakes to find themselves unable to move and terrified. The descriptions of both types of encounters look almost identical when the type of being isn't mentioned, although the modern alien encounters usually involve abduction as well which the Mâran do not.
Food can play a role in both fairy encounters and alien encounters. In traditional fairy encounters fairies would often offer food to people, usually with the intent of trapping the person in Fairy so that they could not leave. In some alien encounters the person is offered food of various sorts as well although the intention is unclear. In fairylore when the food was refused there are stories of the fairies trying to force the person to eat the food or drink the liquid, or physically punishing them for refusing; in the same way in some alien abduction stories there have been accounts of people forced to eat or drink substances, in some cases violently.
Fairies were noted to dance in circles and to leave behind fairy rings in their wake. These could be rings of mushrooms or of darker or lighter grass. UFOs have also been noted to leave circular marks in places they have been seen landing , sometimes flattened grass sometimes burned areas. Similarly the idea of strange lights being attributed to fairies has a long history in folklore, often associated with danger, while UFOs are described as both lights in the sky as well as strange lights seen through trees. These sites afterwards, of both types, are noted to have strange properties and effects on people.
Appearance is an issue that is also brought up but given that fairylore tells us that the Good People can use glamour to appear however they want - and to make our surroundings appear to us however they want - I find this particular angle the weakest. If we expect them to look like what science fiction has taught us aliens will look like, I have no doubt that is exactly what we see during an abduction experience.
There are people who will say that we see far fewer fairy encounters today and fewer fairy abductions, yet now we have this phenomena of alien encounters and abductions, which have many of the same hallmarks. To my mind it seems that the fairies are no less active but have simply switched how people are perceiving their activity so that those who believe in or are open to believing in aliens get aliens, while those who believe in fairies continue to have experiences more in line with older folklore. Fairies used to be feared and that fear had power; aliens still are feared as an unknown and technologically superior factor.
So ,short answer, I think alien encounters and abductions are just fairies dressed up in modern guise. Which is a pretty effective method of both misdirection and control, if you happen to be Them.
For further on this subject I suggest reading 'Passport to Magonia" and "Trojan Feast" both of which discuss fairies and aliens as an interwoven subject.
*there is of course no way to know how long they have existed in oral cultures