Usually translated as the wee folk, these are the people that live in the hills, known in some other cultures as 'fairies'.
Note that when I said in I did mean in. Actually in the hill. Humans will never find the entrance, although they are occasionally abducted and taken in. Lots of placenames (such as Strontian, whence Strontium) and especially hill names throughout Scotland, refer to these places. Lots of information here on Wikipedia and the copious links to places there.
Na Daoine Beaga/The Wee Folk is a euphemism. It is not safe to refer to them directly as they may hear you and get angry. And then you might meet with an accident or never be seen again.
Yes. Single-syllable adjectives add an a or an e (according to the spelling rule) in the plural. There's a couple of other rules that are introduced bit by bit as each rule is only required in certain circumstances.
The only word I could think of or find that begins with L is the word for wee folk that live in Ireland, always wear green and are solitary males - they play tricks on people but do not appear to live in a social group. Most wee folk, (in both Scotland and Ireland) are gregarious. If you get abducted you may be taken to one of their parties and compelled to dance until you collapse.
Interesting. Thinking about it I realise I would express both exactly the same in Gaelic.
But thinking about it further, I wonder if the bigwigs are simply referring to the people who are little and unimportant, or if this itself is a cultural reference to the goblins, elves etc. (different names in different cultures) who sometimes work for humans without pay, such as Santa's elves or The Elves and the Shoemaker of the Brothers Grimm.