Learning one tradition deeply
Folk fantasy requires the writer to commit to one tradition at a depth that most fantasy world-building does not demand. You need to understand not just what the tradition's creatures look like and what they do but why the tradition believes what it believes: what anxieties its supernatural figures embody, what the protective practices reveal about what is feared, what the stories about the dead tell you about the tradition's relationship to mortality. This kind of knowledge takes time and primary sources: the collected field notes of folklorists, not the sanitized versions, and the historical and social context that explains why this tradition developed these particular beliefs in this particular place. The depth is what produces specificity, and specificity is what separates folk fantasy from atmosphere.