According to Hecatia Laspislazuli, Hell wasn't always a place that served to rehabilitate human criminals. It was originally created by people unaccustomed to living virtuously, people with hearts of pure evil, and valorous people who seek true freedom, and was meant to be a place for them to live however they wanted, with no concept of being a bother to others.
Hell continues to be what can be considered a world of pure freedom run by an absolutely meritocratic system, where it doesn't matter who one is as long as they have the power to back it up, making it possible for even fairies to become important if they get the job done. Likewise, this also makes it possible for even kishin to become irrelevant with just one failure.
Fairies are known to be found anywhere and Hell is not an exception. They, along with Clownpiece, originally come from Earth's Hell and were, under Hecatia's orders, immigrated to the Sea of Tranquility on the Moon in order to threaten the Lunar Capital. The Capital then temporarily became a fairy paradise that was said to be more comfortable than Hell, suggesting how awful the environment in Hell is. These fairies were transformed into pure lifeforce by Junko in order to accomplish this. According to Clownpiece, these refined fairies' energies exceeds even that of a kishin.
