Stories reflect Aethyr reflect Reality reflect Stories is my guess.
"Where do spirits come from? What makes them different from demons and apparitions and the like? Because the gods only know how perfect and beautiful a thing must be for an *elf* to want to marry it.
"Well, there's a lot of theories, mostly because it's all tied up in the 'How was the world created?' and "where do the gods come from?' sorts of nonsense that gets people burned at the stake when disagreements get too feisty, so everyone's learned to try and keep on other, safer topics. Means that there's more stalking horses in the literature than theses, bah!
"So throw that whole lot of useless theorists out a second story window. Here's the version I heard from a green dragon when I was younger and joined a muster that included a genuine Athel Loren warband. Long story. Anyways, this is what he said he got from raised him in draconis parentis-
"An'it came to pass, lo these many years ago, that in that swirling twice-rent bubble's skin that holds this world apart from the dreaming sea, a mirror could sometimes be seen, as if between air and sea. An'it reflected the inside to itself. Then the thin wisps of not-yet-spirits first beheld material earth, hidden behind a veil from them, and those beings with the sight for it knew there was more real than the material. And they all watched- letting those wisps of restful magic see the essences of the base earth move as spirits do, teaching them how to be and how to act, that when we call them they recognize our stories and our ways. An call them we do, for we too have watched, and seen them coalesce and stretch, trying to laugh and speak and think, seen their careless power.
"Oh, but they learned to be people too well! And thus did they learn of heartbreak and grief, betrayal and malice. Laughing trees and giggling rivers who have learned too late what innocence was, hands stained with the blood of feuds lately come to and only half understood.
"But take heart little hatchling- there are always more wisps of magic that pool with nothing better to do than watch our reflections and learn. And those older, harder, crueler ones? Well. Become too much like a mortal, and dying begins to matter..."