Just re watched Price of Gold, there were a few things that tie in here.
1) Rumpel told Cinderella that the magic wand was pure evil, and that all magic comes with a price. So are fairies playing around with good and evil in their use of magic, trying to use evil for good?
It could be like Palpatine’s speech to Anakin in Revenge of the Sith at the opera. Where Palpatine twists how the Jedi are viewed as more evil, than good. But it’s all a matter of perspective. Maybe the fairies think that they are doing good, but from our point of view, enslaving the dwarfs to work for them, is evil.