Reading over my last post's links to The Book of Invasions, I could not help but be reminded of Julian May's "Pliocene Exiles' Saga", which began with 1981's The Many-Colored Land. In the book, two related extraterrestrial races, the Tanu (based on the Tuatha de Danann) and the Firvulag (a mash-up of the Fir Bolg and the Fomorians) have emigrated to Pliocene-era Earth, forced out by the society which had given rise to them due to their adherance to an ancient religion rooted in race-based ritualistic warfare. The two races exhibit formidable psychic powers- the Firvulag have operant abilities (illusion-spinning being a particular talent), the Tanu having latent abilities which are stimulated to even more potent operancy through the agency of torcs. The status quo between the two races is disturbed by time-traveling 21st Century dissidents who choose to pass through a one-way time portal in Southern France. The arrival of humans, who are genetically compatible with the extraterrestrials (yeah, it's not hard science fiction at all), upsets the equilibrium of the two races, leading to an eschatological conclusion to extraterrestrial rule.
When I conceived the original title of this post, I had been under the false impression that The Many-Colored Land had been published in the late 70's, and that the githyanki/githzerai conflict had been inspired by the Tanu/Firvulag split in May's series. The book was, however, published in 1981, the same year in which the Fiend Folio was published. Charles Stross' githyanki (a name cribbed from George R. R. Martin's The Dying of the Light) originally appeared in White Dwarf #12, published in 1979, though I can find no mention of the githzerai making an appearance in the magazine. The original thesis of my post being shot down by the intrusion of fact, I would now propose that the inspiration of the conflict could be the Vadhagh/Nhadragh enmity in Michael Moorcock's Corum novels, which were also inspired by Celtic legendry. The Vadhagh and Nhadragh, like the Tanu and Firvulag, are also paranormally-gifted humanoid elder races shaken up by the advent of humanity.
At any rate, Julian May's novels are a goldmine for ideas concerning psionics, and a nice alternative take on Charles Stross' creations (potentially invaluable to those wanted to avoid entanglement with I.P. lawyers). Technological enhancement of psychic powers, "elves" who employ energy weapons and suborbital flyers, illusion-spinning mutant freaks- all can be found in May's gloriously sprawling books. In my research, I discovered that White Dwarf #51 contained writeups of May's creations- I wonder how many readers noticed a certain similarity to previous Fiend Folio creations.