The Faerie City has, among other things, a couple of shops where you can find faerie-related items, an Employment Agency for your pets, and a secret link to the Hidden Tower. (That's where the Faerie Queen sells her very expensive items, like The Sword of Skardsen and the Baby Paint Brush.)
For some obscure reason Faerieland looks like an icy island on the Neopia main map, but it's really just a collection of houses built on the clouds above Neopia Central.