The words faerie, faery, fairy sound the same but have different meanings and spellings. Why do faerie, faery, fairy sound the same even though they are completely different words?
The answer is simple: faerie, faery, fairy are homophones of the English language.
The land or realm of the fairies.
A tiny, mischievous, imaginary being; a fairy.
Obsolete spelling of fairy.
Offensive Slang Used as a disparaging term for a homosexual man.
A tiny imaginary being in human form, depicted as clever, mischievous, and possessing magical powers.
Definitions from The American Heritage® Dictionary of the English Language, 4th Edition, from Wiktionary, Creative Commons Attribution/Share-Alike License and Wordnik.
Homophones (literally "same sound") are usually defined as words that share the same pronunciation, regardless of how they are spelled.