Folktales have their origins in oral storytelling. This means that the story passes from storyteller to storyteller and from one generation to the next, orally. Every time the story is told by a different person at a different time, it changes, as new things are added or taken out of it, and as every storyteller tries to make the tale his own. Eventually folktales get written down, but they never start on paper. Fairy tales, on the other hand, are most often written down first and then accept changes made by different writers rather than oral storytellers.
Folktales often get written down eventually, however the writing used resembles the spoken word a great deal. Being characterized by a highly conversational tone, folktales are easy to distinguish from fairy tales in the way that they address the reader directly and use informal, casual language.
Fairy tales always have a specific writer. This type of story is therefore usually more complex and less natural than folktales. They are not the result of years of collective storytelling, but rather the outcome of a single author's inspiration. Folktales are usually more simple and tend to represent the people of any time, place and background.
Folktales generally present the world as it actually is. Even though in both genres a highly supernatural atmosphere is evident, in most cases fairy tales make this world look like a better place to be than it actually is. Fairy tales, unlike folktales, tend to idealize situations and offer a magic place for the reader to escape to. Folktales, on the other hand, try to inform and make readers aware of the dangers that they might face.