I've referenced the book Jonathan Strange and Mr. Norrell here before; it's not exactly a fairy tale but it does describe the world of Faerie in a way that I love. Though there is magic in the world, it is dangerous and unpredictable, much like many faeries in folklore. It is literally one of my all time favorite books, so if you like well-written period fantasy, I highly recommend it. (Plus, you could really argue that it incorporates "Twelve Dancing Princesses" as well).
I've been wanting to reread the book again, but not sure if I'd have the time, so I was thrilled to find this book at the library instead: a collection of short stories by the author, Susanna Clarke, The Ladies of Grace Adieu, set in the world of Jonathan Strange.