I LOVE that idea! I threw a baby shower this past weekend--it was a couples shower though and we did a sort of italian restaurant theme with red checked table cloths, etc.
For fairy Godmomma you could string twinkle lights around the room-- gifts could be pretty candles wrapped in irridescent paper and tied with ribbons. I'd do everything in white and silver and pastels--very fairy like.
Good luck and have fun with it!!!