Think round, not square
Fairy houses look best with circles and domes instead of boxes. Use a cylinder for the stem or trunk and a dome for the cap or roof. If you are building by hand, lay out a circle on the ground first and build up from it.
Mushroom caps need spots
A plain red dome looks like a hat. Add white blocks in small 2 by 2 patches, and put them at different heights so they follow the curve. Red mushroom blocks, red concrete and red wool all work, and white concrete makes clean spots.
Go soft on colour
Pink, cream, light green and yellow feel more fairy than strong primary colours. Cherry leaves and pink wool give a blossom look, and moss blocks around the base make the ground look mossy. Keep brown for logs and doors so the pastel colours stand out.
Light it like fireflies
Shroomlight, glowstone and lanterns tucked into leaves and caps glow like little lights. Glowing yellow glass in the windows looks warm from outside. Because these builds are hollow, put a light inside every room so mobs cannot spawn.
Make the garden part of the build
A fairy house on bare ground looks unfinished. Add a stone path, a small pond with lily pads, rows of coloured flowers, baby mushrooms and a fence. These small details are what make people say it feels magical.
Keep rooms tiny and cosy
Fairy rooms should be small. A bed, a table and a lantern is enough, and a 5 by 5 floor feels cosy rather than empty. For a tall tree, a spiral staircase through the middle saves a lot of floor space.