According to the Ohio State University's Department of Horticulture and Crop Science it can be produced by 50 or more species of soil-inhabiting fungi. These fungi grow on decaying organic matter, and are often associated in thick thatch lawns or in areas where trees have been removed.
Fairy rings can take on different patterns, including mushrooms that appear in circles or arcs, as dark green rings with mushrooms arising from them, or as a circular area of dead grass in the center of a dark green ring. The mushrooms are the fruiting structure of the fungus. Rings vary in size from three to four feet in diameter up to 200', and rings can be just a few inches wide up to two feet wide. Rings can enlarge each season from a few inches to several feet in diameter, though they sometimes disappear for a year or more and then reappear.
The darker green ring of grass is due to increased nitrogen that becomes available as the fungus breaks down organic matter in the soil. Brown or thin grass may develop inside the darker green ring, which is related to drought stress caused by dense growth of underground fungal structures.
There is little that can be done to control fairy ring, though symptoms can perhaps be suppressed. Fertilizing lightly may reduce the contrast between the lawn and darker green ring, as will irrigating with large quantities of water.
While speaking with associates in this industry this seems to be common in the U.S. Pacific Northwest.
For extreme cases an excavation can be done by digging the infected areas to a depth of 2 feet and extending 1 foot around the diseased patch. Then fill in and re-sod those places.