Redcaps are a species of Fey known for their ... red...caps. Somewhere in the Feywild an anthropologist wanted an early lunch. These caps are actually powerful magic items, providing an armour bonus which scales logrithmically with the number of freshly-slain sentient creatures whose blood it has absorbed. 10 kills gives a +1 bonus, 100 kills a +2 bonus, etc. This has unfortunately pushed Redcap culture in the direction of bloodthirsty psychosis, with the average Redcap liking nothing better than killing other sentients.
Some people are so evil that they would burn down an orphanage. Redcaps wouldn't burn down an orphanage; they'd go from bed to bed with a knife.