The idea of the Unseelie and Seelie Courts may of been Christian elements brought into the pagan world as the Unseelie Court translates into "unholy" or "wicked" while Seelie roughly means "kind" or "blessed" - in this way the two fairy factions parallel in some ways the battle between angels and demons in orthodox Christian teachings.
According to legend fairies come in several varieties, the household spirits such as the brownies - who enjoy human company and tend to be solitary, the solitary faires - who tend to be either malevolent or simply antisocial and live alone, such as the leprechauns and the trooping faires, who live in large communities and can be of varied personalities - such as pixies.
Of all the trooping fairies however the Unseelie Court was seen as the most dangerous to man and often went on wild hunts, spectral spectacles in which goblins and ghouls of every size would run rampant and cause all manner of mischief, taking mortals on madcap rides, frightening livestock and ruining crops - later tales also told of how the Unseelie Court was accompanied by covens of witches (a latter addition told to further anti-pagan beliefs).
The Unseelie Court contained many horrific monsters, demons and fairies that could vary from being mischievious to being truly wicked and they were said to be most active around the hours of midnight and three at night (midnight often referred to as the "Witching Hour" and three at night known as "the Devil's Hour").
Unlike the Seelie Court the Unseelie Court needed no provocation when it came to attacking humans and took delight in their work, like all fairies they were said to be weak to cold metal and Christian imagery and as the traditional haunting grounds of the fairies became converted tales of the Unseelie Court died away - though they continued to be spoken of in folklore into the 20th century, though actual belief in them has not been widespread for hundreds of years.