The Story of Lulu
Lulu is a yordle who spent so long in the Fae Realm — the magical space between Bandle City and the mortal world — that she lost track of the years and came back changed. She brought Pix with her: a sprite who serves as her companion and co-conspirator, visible only to her and to the occasional person who has enough magic in them to see that sort of thing. She treats Pix as a friend and confidant. Everyone else treats Pix as a sign that something unusual is happening.
Her magic warps reality in cheerful, unpredictable ways — she can make people larger or smaller, transform them into animals, shower enemies with polymorphic magic that rearranges them into things she finds more appropriate. She applies these abilities with the particular logic of someone who spent formative years in the Fae Realm, where the rules of cause and effect are different and creative solutions are often more literal than anyone expects. She genuinely intends to help. What "help" looks like is context-dependent.
She is not confused about the nature of reality. She simply experiences a larger version of it than most people have access to, one that includes Pix and the Fae Realm's warped causality and the magical connections between things that ordinary perception filters out. She wanders wherever seems interesting, assists people who seem like they need it, and is generally too enthusiastic about the possibilities of enchantment to notice when her solutions are alarming to the people they're being applied to.