Here are some folk horror movies that aren't THE WICKER MAN, BLOOD ON SATAN'S CLAW, or WITCHFINDER GENERAL. Such strange entities do exist. Perhaps the best examples were created for British TV in the Seventies, but there are a few films out there that use folkloric ideas and/or imagery.
ABSENTIA - A relatively low-budget chiller with the premise that monsters lurk in dark places, waiting to ensnare unwary travellers. In this case the lair of the entity is an underpass near the home of a woman whose husband vanished seven years before the film begins. While low key for most of its length, this one has at least one moment of visceral horror.
THALE - A Norwegian tale of huldras, mysterious forest-dwelling entities. The film begins when a clean-up crew go to the house of an apparent suicide and find a secret basement room, complete with weird equipment. They also discover what seems to be a beautiful young woman, Thale, who soon turns out to have strange powers. It''s pretty good for a low-budget film and offers a new take on the old question, 'Who are the real monsters here?'
NIGHT OF THE DEMON - Well, why not? Here we have a witch-cult active in rural England, complete with rituals, symbols, horrific deaths. The very idea of casting the runes is rooted in magical tradition. All of the adaptations of M.R. James stories are to some extent folk horror because they are rooted in landscape and rural beliefs in a way that most Gothic fiction is not.