Fantasy Books/Movies: Why are elves represented so differently?

[elfdream]

Tolkien was trying to create a mythology for England. In other mythological traditions the 'gods' were involved in human life. Some civilizations were thought to be descended from them. While Tolkien was careful to not make the elves divine he did give them the characteristics of what he thought would be unfallen immortal beings who guided and taught mankind. They were not really angels either. They were like humans, only better.
Why he choose to call them elves I do not know.