The Elven Homewood is a magical place (for ease of 5th Edition reference) like it’s a bit of the Feywild impinged on the mortal world. There are strange magics there that humans will have a hard time with. Illusion, phantasm, nature-magics… scrying… non-elves get lost, and have their perceptions messed with there. Elves travel very quickly in the Homewood, like teleportation but more like Fey-stepping or folding space. Elves who leave the Homewood carry some of this magic with them, but tend to not use it because it scares the mortals.
In their natural state, True Elves are basically energy beings, harmonious notes in the song that sang the world into existence. They are something like angels, but they are earthly beings too. They are tied to the world of Erldworn, and their fate is closely connected with the fate of the world.
With the rise of the younger races, with the coming of awareness to creatures who were not part of the bindings of the Deep Magic, the High Lord (whom the elves know as The Singer) tasked the Elves with maintaining the health of Erldworn and shepherding the new minds until they could understand with Creation meant.
The Arch Fey are elves who have taken physical form for so long that they cannot change back. They oversee the Elven Homewood.
Eladrin are part elf and part human… actual half elves.
High Elves are quater elves
Moon Elves are 1/8th elven
Wood Elves are 1/16th elven
Half Elves are 1/32nd elven or lower