Green’s Dictionary of Slang

fairy n.3

[fairy-story under fairy n.1 ]

1. a fanciful tale, a ‘tall story’.

[Aus]Bulletin (Sydney) 27 Oct. 24/1: He had told the inquiring stewards a lot of ‘fairies,’ though they didn’t save him from being ‘rubbed out’ for 12 months.
[Aus]Sun. Times (Perth) 19 June 1/1: A punting pal pitched him a fairy about judicial fury .
[US]C. McKay Home to Harlem 66: Don’t hand me none o’ that fairy stuff, for I ain’t gwine to swallow it.
[Aus]H. Drake-Brockman Hot Gold III i: Who told you that fairy, sergeant?

2. the teller of fanciful tales.

[Aus]Bulletin (Sydney) 20 Oct. 24/2: A wish to be seeing this tipstering being, / Impelled me behind the partition to glance, / And there stood a hairy and beer-sodden ‘fairy,’ / Beguiling a swell with his little romance.

In phrases

pitch a fairy (v.)

to tell a ‘tall story’.

[Aus]Bulletin (Sydney) 29 Nov. 31/2: After that, we nicknamed each one accordin’ to his perktickler perculyeraraty, an’ uster pitch ’em fairies about how we wur learnin’ colonyal, an’ gettin’ remittances from ’Ome.
[Aus]B. Wannan Fair Go, Spinner 103: He’d pitch ’em lots of ‘fairies’.