Each assignment to be completed takes time, and a specific kind of time at that. Faerie development progresses from advancing the plot of the game and/or fighting battles. Spending time in the village, walking around the overworld, and fishing will not allow the village to advance. Fighting battles (regardless of experience), and moving the story along will do the trick, so the player should visit the village periodically, especially after finishing dungeons or doing some level building.
The first thing after coming to the Faerie Village, is to check the message board for any news. Nearly everything that happens is written down on it.