The red little hats of Gnomes and the Scandinavian Tomte might go back to the shamanic use of Amanita Muscaria.
The “Hexenkreis” in High German (witches-circle), called the fairy circle, is believed to be a portal to the spirit realm and is a sure sign of ritual use in many folklore tales, from Ireland to Germany, the apperance of Amanita is usually associated with the little gnomes, nature spirits that sit on top of the caps or hide underneath it. These images are old.
Shamans often report seeing nature-spirits and mushroom-people. Mushrooms do the work of the Underworld. They recycle, they transform and absorb. They grow deep down underground, from the womb of Hel, Saivo, Holda/Frau Holle, Durga and Kali, Xibalba, Annwyn and many more.
What is truly fascinating is how mushrooms can be found in many fairy tales and folklore even today. And it is often so, that mushrooms are associated with the Underworld.