fairy vs water nymph

fairy and water nymph both are nouns.

Word	Noun	Adjective	Verb	Adverb
fairy	Yes	No	No	No
water nymph	Yes	No	No	No

As nouns, water nymph is a hyponym of fairy; that is, water nymph is a word with a more specific, narrower meaning than fairy:

fairy (noun)	water nymph (noun)
a small being, human in form, playful and having magical powers	(Greek mythology) any nymph of the water
offensive term for a homosexual man	a fairy that inhabits water
	submerged aquatic plant having narrow leaves and small flowers; of fresh or brackish water
	a water lily having large leaves and showy fragrant flowers that float on the water; of temperate and tropical regions