In ages past, the forest and its trees was considered to have a spirit or a soul.
In prehistoric (and current) animistic beliefs this soul permeates all and everything in nature, including ourselves, and it is continually interacted with and affected by human action.
The same basic concept can be found in polytheistic beliefs, but in these the soul tends to take many different, often physical, shapes. Thus, the forest nymphs, or dryads, were a way for ancient Greek and Roman religion to visualize and personify the soul and the spirits of the woods and give them antropomorphic (that is, human-like) features. In this way, these forces could be directly bargained with in an eye-to-eye kind of fashion, and they were expected to directly intervene in human affairs when they so chose.
As the monotheistic beliefs came to dominate the western part of the world, such beliefs were sidelined in favour of the belief in a single all-powerful being which controlled all of nature according to its divine will. Pragmatic and materialistic ideals came to dominate most of the cultures adopting this new view of the world.
People seemed to retain a need to to see nature as besouled and able to be bargained with, however. This need led to a separate set of beliefs, unendorsed by the Christian Church or its counterparts (but sometimes conceptually intertwined with them), which had a life of its own among the common folk. Thus, we got the many beings and beliefs of folklore. These harken back to the very first human religions and have filled a void and a need in human society; the void created by our estrangement from nature and the need to find a meaning and a connection to it.