The Origin of the Elves : Two Versions - Iceland

 

Once, God Almighty came to visit Adam and Eve. They received him with joy, and showed him everything they had in the house. They also brought their children to him, to show him, and these He found promising and full of hope. Then He asked Eve whether she had no other children than these whom she now showed him. She said "None." But it so happened that she had not finished washing them all, and, being ashamed to let God see them dirty, had hidden the unwashed ones. This God knew well, and said therefore to her, "What man hides from God, God will hide from man." These unwashed children became forthwith invisible, and took up their abode in mounds, and hills, and rocks. From these are the elves descended, but we men from those of Eve's children whom she had openly and frankly shown to God. And it is only by the will and desire of the elves themselves that men can ever see them.

 

Note : In Northern traditions Elves and similar supernatural creatures are frequently referred to as the "Hidden-Ones". This tale seeks to explain this term which is far older than the advent of Christianity in Northern Europe. - Shaun D. L. Brassfield-Thorpe

 

Once a traveller lost his way, and he knew not whither to turn or what to do. At last, after wandering about for some time, he came to a hut, which he had never seen before; and on his knocking at the door, an old woman opened it, and invited him to come in, which he gladly did. Inside, the house seemed to be a clean and good one. The old woman led him to  the warmest room, where were sitting two young and beautiful girls. Besides these, no one else was in the house. He was well received and kindly treated, and having eaten a good supper was shown to bed. He asked whether one of the girls might stay with him, as his companion for the night, and his request was granted. And now wishing to kiss her, the traveller turned towards her, and placed his hand upon her; but his hand sank through her, as if she had been of mist, and though he could well see her lying beside him, he could grasp nothing but the air. So he asked what this all meant, and she said, "Be not astonished, for I am a spirit. When the devil, in times gone by, made war in heaven, he, with all his armies, was driven into outer darkness. Those who turned their eyes to look after him as he fell, were also driven out of heaven; but those who were neither for nor against him, were sent to the earth and commanded to dwell there in the rocks and mountains. These are called elves and hidden people. They can live in company with none but their own race. They do either good or evil, which they will, but what they do they do thoroughly. They have no bodies as you other mortals, but can take a human form and be seen of men when they wish. I am one of these fallen spirits, and so you can never hope to embrace me." To this fate the traveller yielded himself, and has handed down to us this story.

 

Source: Jón Arnason, Icelandic Legends, translated by George E. J. Powell and Eiríkur Magnússon (London: R. Bentley, 1864). Translation adapted slightly here.