FAIRY HERITAGE

The easiest way to think of the fairies’ magic and magical heritage would be to compare it to the basic reproduction and XY sex-determination system. I think this is covered in basic 8th-grade biology (at least that's when I learned it).

(https://en.wikipedia.org/wiki/XY_sex-determination_system ⇐ Should be somewhat helpful if you are unfamiliar with it.)

All females have XX chromosomes and males have the XY chromosome. These two chromosomes have basic markers that decide what genitalia an embryo develops and eventually gets categorized as either a male or a female.

The Fairies cannot actually create magic but have the capacity to process the magic in the air into spells or to grant wishes. In the other world, there is a very limited amount of oxygen in the atmosphere but there is magic; which is what the inhabitants of that world survive off of.

That is why the children with too low of a % would not have been able to survive if they were born into the human world and brought back to the other world. They would not be able to process enough magic to be able to function and would have died with symptoms similar to asphyxiation.

The analogy to the Xy chromosome somewhat works in the same way in that the ability to process magic is passed down through the X chromosome. That is why Females can use magic better than males and have risen to become the dominant members of society in the fairyland. Because as carriers of the Double 'X' chromosome they have a higher capacity and therefore higher efficiency. Sort of like using a spoon to fill up a barrel vs using a bowl.

For Fairy to fairy or Fairy to human pairings that would stay true and the other ‘chromosome’ would be either modified to be able to adapt to magic. As long as the Other chromosome that is not from the fairy parent is not inhibited or obstructed in anyway then the child should have fairy characteristics. : I.e. wings:

How it gets complicated is in Fairy and Goblin parings where the X chromosome is dominant for the fairies and the Y chromosome is dominant for the goblins.

You could be reading stolen content. Head to the original site for the genuine story.

(once again this is an analogy and the passing down of capacity is a separate function from the sex-determination system. They are codependent on one another but are two separate functions)

If a child borne from a Fairy and goblin paring were to be a Female with the XX pairing then it would most likely receive the X from the goblin, rather than the dominant Y and would quickly be overpowered by the Fairy’s gene.

The resulting child would receive the physical superiority of the goblins as a result of this union, solving one of the main issues of the faires, being their naturally weaker bodies. 

 If the child were to be born a male with the XY pairing, then it would have received Both dominant genes from its parents.

Goblins have another gene in the Y chromosome that completely converts and amplifies the magic provided by the X chromosome into Goblin magic.  That is why goblins with fairy heritage are much stronger than their counterparts. That natural conversion makes those children all the more resistant to fairy magic and makes their goblin magic stronger as well.

I won't go into depth because it would be a spoiler but that is why Finn is so rare.

Going by the same analogy, his 'Y' chromosome probably mutated to allow him to still be able to manifest magic in both types of ways. Sort of a partial mutation.

The analogy of magic to the sex determination gene is not a perfect one by any means and there are a few differences but it's easier to picture with it.

Now moving on to the differences between Royals, Nobles, and commoners. 

The difference lies in their magic capacity and it is entirely hereditary. Kind of like height. it is also why partnering in order to create children is so strictly regulated for the royalty and high classes.

The royals are born with an ability to purify the magic in the air that is being absorbed by the inhabitants and is why it is absolutely necessary for there to always be at least one royal within each race. They also have a higher capacity to process magic.

Going back to the example of a spoon vs a bowl to fill a barrel.

A commoner female would be able to use a cup to fill the barrel.

A lower Noble would be able to use a jug. (Earl- baron)

A higher noble, Duchess-Marquis) would be able to use a bucket.

And a Royal would be able to use a barrel.

(https://www.infoplease.com/whos-who-monarchy <== The Fairies only have up to the King rank rather than emperor but aside from that, the link should explain the orders of the ranking.)