According to a theory that comes, yet again, courtesy of Reddit, Timmy's fairy godparents are simply metaphors for Zoloft and Prozac — they're there to help him through his problems, but only until he doesn't need them anymore. Plus, not only did they start showing up at the same time as his problems, but there are some serious side effects every time he abuses their "magic."
Or maybe they're just imagined by a sexually abused little boy
Here's another theory: "The Fairly Oddparents is about a kid playing pretend with his fish. His godparents died in a car crash when he was younger; since they were the only adults who ever understood him, he finds comfort in imagining that they are there to watch over him, since his parents obviously don't care. His babysitter slaps him around but he isn't brave enough to tell on her. The granted wishes are all in his imagination, hence why they never have any lasting consequences. Mr. Crocker has made sexual advances on young Timmy for years, hence the delusion that he is desperate to steal Timmy's 'fairies,' which represent his innocence, joy, hope, and good wishes for the future." Now that is bleak.