I read this in the seventies - can't remember if paperback etc. Could have been YA.
It's set in southern England, at some place where Downs country meets marshland. There are two types of 'little people' who live in hiding (at one point a full grown one was compared in height to a schoolgirl and he was around 4 foot 8 inches)
One clan lives on the Downs with hidden places inside hills, they mostly herd sheep.
The enemy clan lives in the marshland with vast caves where they dive underwater to enter.
These clans are hostile and kill each other if they find wanderers. Sometimes small wars happen. Always in secret from humanity (they call us giants) In local villages there has been folk tales for centuries about the 'fair ones'
The fairies have a limited sixth sense and a deep understanding of nature, they can sometimes get rabbits to walk directly to them for capture.
Some teens get involved somehow with an injured Down dweller who is trapped and they help fend off a marshlander attack.
Then they end up also looking (I think) after a marshlander but the rest has faded in my memory.
One final bit...they find out the marshlander has only eaten sweet things once or twice in their life because it's very difficult to get sweet stuff in water. A horrified fat kid dashes off home and comes back with a load of biscuits and chocolate.