water nymph vs fairy

water nymph and fairy both are nouns.

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

As nouns, fairy is a hypernym of water nymph; that is, fairy is a word with a broader meaning than water nymph:

Other hypernyms of water nymph include faerie, faery, fay, sprite.

water nymph (noun)	fairy (noun)
(Greek mythology) any nymph of the water	a small being, human in form, playful and having magical powers
a fairy that inhabits water	offensive term for a homosexual man
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