I feel like you need some sort of lawful force, otherwise there is no Chaotic/Lawful conflict, and you might as well eliminate that alignment in your setting. However, that would be missing a great opportunity, especially since fey represent such a big role. I'd consider adding in more chaotic vs. law conflict rather than purely good vs. evil, especially to give your game more morally ambiguous situations.
Also, your new race is LA+1 in pathfinder. It may not be able to do tier1 casting well, but it gives huge boosts for melee-ers and combat divine casters.