The first fairy you can free is by going to the broken golden obelisk in the lower east forest, just past where you are ambushed by spiders. There will be two guards standing by it - usually you would need to travel the entire overworld and piece together the obelisks pattern using memory alone as you can't pick any of the pieces up because it's part of the environment - luckily the solution doesn't change so here it is!

Stand by the broken obelisk and on your D-pad input the code:
Down, Right, Down, Left, Up, Left, Down, Left, Up, Right, Up, Left, Up, Right, Up, Right, Up, Left, Up, Right, Down, Right, Down, Right, Down, Left, Down, Right, Down, Left, Up.

The chest should then spawn, open it and a fairy will fly out and the achievement will pop.