Iron as a ward against hostile magic is traditional folklore all across Europe. This is why horse shoes are considered lucky - when nailed above a door they protect the household against malicious nature spirits. Over time the shape has become associated with protection, but orriginaly it was just that they were the most convenient lumps of iron available.
One theory behind this is that iron was introduced by farming cultures, that colonised (well, pretty much invaded) Europe. Iron was the super-weapon that they (we) used to take the best land. The previous bronze age cultures became increasingly marginalised, untill they were either assimilated or wiped out like the picts. It was these short, funny-looking, non-iron-using aborigines, that had been driven out to the wild fringes of the known world, that may be behind the stories of faery folk.
Simon Hibbs
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