Okay after a bit of research and some help from sumwun's comment I think the reason is that that fairies and toadstools (mushrooms) have been associated with each other since ancient times as seen in many Scottish fables. Fairies are believed to use the cap of the mushrooms as their resting place. Also when mushrooms form a ring like shape on the ground, the circle formed is believed to be a fairy ring which is considered to be good and bad in different folklores. Also Breloom's Fighting-type corresponds to the fact-to some extent-that a fairy ring must be protected at all costs from outsiders. That's the best explanation I could come up with.
Hope I helped! :)))
