Dumb question. Why Savage Worlds? I strongly believe that system matters, though I don't wear that badge in a in-your-face "Forgian" way. Savage Worlds is balls-out cinematic. I would have thought you want something a bit more subtle, perhaps. So can you explain why you believe SW will be a good fit? What will that system add to your setting?
Also, you should read Don't Rest Your Head for inspiration in regards to the idea of a dark city "under/around/within" the city and suddenly waking up to it.
Wow, I'm glad I checked back! Sorry I didn't do so sooner, I didn't see a lot of activity so I assumed the forums were dead.
With regards to the choice of the Savage Worlds system, it IS very cinematic and it works well for what has already been tested. Due to the high probablity of player success due to dice mechanics I find GMs don't have to pull their punches (or at least not as severly). Cinematics also work well for "over-the-top visuals" and epic feel and mood of the fantasy and Fae genres. I am also a fan of the multi-dice systems as it requires less math. For those wof us who aren't left brain dominant it's a blessing. Less math means less slowing the flow of the story. I'm considering a D20 version but that's in the future. Please feel free to look at the NightWatch/DayWatch books, American McGee's Alice: The Madness Returns Art Book (it has material not released in the games and breathtaking visuals), A Midsummer's Night Dream and my favorite poet Christina Rossetti.
I'm curious as to why when "Fae" is introduced everyone assumes "Changeling"? The system and world provide the barest resemblance to anything Fairy Tale related and it questionably follows the genre's tropes. In Changeling, you are the centre of the world and the drama. In Fae Nightmares you are towards the periphary; you may be powerful but you are not the movers and shakers of this world (nor should any sane nightmare want to be!) Also, there is no morality system or "clarity sins". If you want to a murderous-bastard: go for it! Though be warned the world will reinforce consequences as this is a much more consequence heavy world.
Thank you for the suggestion of looking at Don't Rest Your Head for inspiration. I'm aware of this RPG but this is not where I feel inspiration or research is best garnered from. Instead I've been researching Celtic, English, Irish, Japanese, African, South American, French, Canadian and Native American Fairy Tales and Folk-Lore. I've also been working with a Professor of English who specialises in this field of study. This is also a large part of the differentiation from Changeling along with the more active and variable role of the Fae. While the world does use Fae courts they are directly reference fairy tales and there's no "transition of power" through anything other than diplomacy/war in this guess it's a territory lost. Theses courts would have more in common with vampire courts which are always at war (cold/hot) with each other with a precious few on the peripheray which seems to relate more closely to old world Fae courts.
Currently all the Nightmare types have been written along a Gazetteer for turning cities into Fae warzones and kudos to Rob Lang for suggesting Gods, Goddesses and a Pantheon of Deities, I love the extra (optional) layer of conflict it adds. Since the Fae have no souls we had to come up with a plausible reason and by Harry we got three! I admit, it wasn't part of my original plan but when Rob comes up with a good idea: it's a good idea!
Thanks for the valuable feedback and suggestions I look forward to hearing more