The Faerie Thief is a minion of King Terask. When he took control of Faerieland, the Thief was appointed to seal the doors to the castle, and attack Faerie City.
So, you want to get into the Palace and take on the King, eh? Well I've put shielding wards over the palace doors. You won't be able to enter unless you defeat me. Not that you'll be able to!
As most of Neoquest II takes place within computer simulation, it is unclear if the Faerie Thief exists in the real Neopia.