Two young girls who believe that fairies are real attempt to prove it to the world in this drama based on actual events. In 1917, there is little to be happy about in the Wright household in West Yorkshire, England. Polly (Phoebe Nicholls) and her 12-year-old daughter Elsie (Florence Hoath) are still grieving over the death of Elsie's younger brother, and Polly's niece Frances (Elizabeth Earl) has come to stay with them after her father was declared missing in action during World War I. Polly longs for some sort of proof that there is a life beyond our own, while the two girls ardently believe in fairies and enthusiastically study legend and lore. One day, Elsie and Frances produce photographs of fairies that they claim were playing in their garden; Polly believes that they are real, and soon the snapshots attract international attention. Sir Arthur Conan Doyle (Peter O'Toole), author of the Sherlock Holmes mysteries and a confirmed spiritualist, declares the photos "as genuine as the King's beard," while illusionist Harry Houdini (Harvey Keitel), who has devoted much time and energy to exposing phony mediums and psychics, takes a more skeptical view. While Fairy Tale: A True Story presents the appearance of the fairies as fact, analysis of the photographs proved them to be fakes (especially after the same fairies were discovered as illustrations in a children's book published before the photos were taken). The real-life Elsie Wright admitted late in life that the fairy photos were a hoax performed as a "little joke" and that she was always surprised that so many people believed them.