
Writing fantasy is very different than writing science fiction. After a lot of pondering, I managed to come up with some simple rules that make a lot of sense and help one to avoid the overuse (or underuse) of capitalization.
Will your character stumble upon an indulgence of leprechauns who have overindulged in drink? Perhaps your character will seek out a swell of naiads, a delectation of nymphs, a pleasure of pixies, or a resolution of sprites. Is your character so excited to see Santa that he will try to catch him coming down the chimney? How surprised will he be when he discovers that Santa is an elf?