From the belief that it is a dancing place for fairies
American Heritage Dictionary of the English Language, 5th Edition
Fairy-ring Sentence Examples
Many other fungi in addition to the fairy-ring champignon grow in circles, so that this habit must merely be taken with its other characters in cases of doubt.
The most complete and symmetrical grass rings are formed by Marasmius oreades, the fairy ring champignon, but the mushroom and many other species occasionally form rings, both on grass-lands and in woods.
Marasmius oreades, the " fairy ring champignon " that can cause killing zones in grass turf.