I don't know why they didn't just call them the Light type, that would've made way more sense, calling them the fairy type just makes them sound like they ripped off Yugioh IMO.
Looking back, they could have added the strengths and weaknesses to the psychic type. It still would have made sense and they could have easily hand-waved it as psychic types gaining mysterious power due to the rise of technology or something like that. I do like how fairies made poison and steel more viable in battle, but they really made psychic no longer necessary/redundant to have around.