water spirit vs faery

water spirit and faery both are nouns.

Word	Noun	Adjective	Verb	Adverb
water spirit	Yes	No	No	No
faery	Yes	No	No	No

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

Other hypernyms of water spirit include faerie, fairy, fay, sprite.

water spirit (noun)	faery (noun)
a fairy that inhabits water	the enchanted realm of fairies
	a small being, human in form, playful and having magical powers