No family in the region had a worse reputation than the Stadgaar clan. The list of deeds attributed to members of the clan reads like a catalog of infamy: murder, treachery, torture, extortion, demon worship, et cetera. When at long last the family line declined and vanished with the death of the dowager Grenda Stadgaar more than a decade ago, the family mansion fell into disuse and disrepair.
Locals give the Stadgaar lands and ancestral home wide berth nowadays. Eventually, they say, the wilderness, time, and the elements will blot out the evil stain left on the land by the Stadgaars. Until then, foul spirits haunt the mansion, and only the foolish or the wicked would trespass on the estate.
The Things in the House
Yes, the Stadgaars were a wicked clan, but their wickedness had nothing to do with demon worship, murder, or torture. Theirs was a more common sort of wickedness: greed, emotional cruelty, dishonest business dealings, et cetera. Rumors of infernal activities started among the locals as malicious gossip, and the Stadgaars did little to discourage such rumors. Some family scions reveled in the dread they saw in people’s eyes. Over time, what started as gossip took on a life of its own, becoming part of the oral history of the region.
The decaying mansion and surrounding woods are not haunted either. Rather a family of fayeryes have moved onto the estate. Fayeryes are a type of woodland faerie with a fondness for places abandoned by humans and halflings. Secretive and territorial, fayeryes use their magical powers to discourage intruders. If that doesn’t work, they hide and wait for the intruders to leave. Fayeryes avoid violence unless attacked or their youngs’ nurseries are threatened. In the latter case, fayeryes become especially fearsome.
For Swords & Wizardry:
Hit Dice: 1
Armor Class: 7 
Attacks: Bite (1d3)
Saving Throw: 17
Special: magical abilities, stealth
Challenge Level/XP: 3/60
Fayeryes appear to be a cross between a long-tailed monkey and a wild cat. It would be easy to mistake a fayerye for a beast of the forest but for their large, intelligent eyes and expressive faces. Once per day each, a fayerye can “cast” darkness 15′ radius, hold portal, sleep, and mirror image. At will, a fayerye can “cast” phantasmal force. Fayeryes are stealthy and fast. They can hide in shadows and move silently (85% both). They infallibly climb walls and vegetation. When defending their young and/or a nursery, fayeryes can “cast” monster summoning I once per day. These summoned monsters fight with a +1 bonus to attack and damage rolls.