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The Dark Fairy is an evil Fairy. However a normal Fairy who does bad things is not necessarily a Dark Fairy as some Alfea fairies have been shown having bad behavior and manners, and the Major Fairies of Earth have, during their revenge, been more on the bad side without really turning evil, but they still remained normal fairies and did not become dark fairies.
A Dark Fairy is either a Fairy who has turned to evil or whose powers become fueled by Evil and Darkness more like a Witch's powers while the powers of normal Fairies are fueled by Light.
A Dark Fairy can also be a person who is able to become a fairy but instead of gaining good magic gains evil magic. It seems that an evil spell is needed to turn people into Dark Fairies, like Lord Darkar turned Bloom into Dark Bloom or when the Wizards of the Black Circle turned Mitzi and her friends into Dark Fairies.
Just like Witches, the bad nature of Dark Fairies' powers are shown by their dark clothing.
The first time a Dark Fairy was shown was in Season 2 when Bloom was turned into an evil Fairy by the fake professor Avalon at Alfea. Bloom then stormed into the Secret Archives of Alfea and attacked Concorda to find the piece of the Codex of Alfea, which she ended by giving to Lord Darkar. This spell seemed quite weak as Lockette's magic kiss was able to turn Bloom back to her old self for some seconds before she turned evil again. The false Avalon then "healed" Bloom, who could no longer remember anything about what happened. Bloom's state was apparently caused by a kind of Shadow Virus which contaminated her. According to Miss Faragonda only the person who had put Bloom under influence of that virus could heal her as easily as "Avalon" did, and this was partly how the identity of the fake Avalon was revealed.
Later Bloom was captured by Lord Darkar and turned into Dark Bloom by a spell of Darkar's. The spell turned Bloom herself evil, and her powers remained unaffected and were not fueled by darkness because Lord Darkar needed the power of Light in Bloom's Dragon Fire to balance his power of Darkness to gain the Ultimate Power of the Realix Dimension.
This time the spell which turned Bloom evil was stronger than the one originally put on Bloom by Avalon, because Lockette's magic kiss had no effect on Bloom. While Darkar himself said that Bloom had now passed to the dark side for good, Dark Bloom was not a complete dark fairy because when Sky admitted his love to Bloom her good feelings surfaced and broke Darkar's spell and turned her back into a normal Fairy. Bloom later said that she could remember everything from when she had been turned evil by Lord Darkar.
Other Dark Fairies
Mitzi, Sally and Darma as Dark Fairies also appeared in Season 4, when the Wizards of the Black Circle turned Mitzi and her friends Sally and Darma into evil Fairies. It was their magical powers which were then fueled by Evil and Darkness that made them evil (with help of their own bad feelings). They caused negative feelings to appear in the hearts of nearby people in opposition to Believix which causes good feelings to appear in the hearts of people.
However the Winx helped the nearby persons and used the power of their Believix to cause good feelings to appear in the hearts of the people. This weakened the evil powers of Mitzi and her friends, which were fueled by the bad feelings of people, till their Dark Fairy powers were destroyed and the spell of the Wizards broken. Mitzi and her friends then turned back into normal humans, but could no longer remember anything from when they were Dark Fairies, and possibly from when they met the Wizards, though it could be that it was a ruse by them so that they do not have problems.