It is uncertain whether the name refers to the hill or the barrow on it, but it is assuredly true that fairies danced on Cauldon Low. This regular occurrence was documented by Mary Howitt in 1847 in a poem called "The Fairies of Cauldon Low: a Midsummer Legend":
Oh! Tell me all, my Mary,
All, all that you ever know;
For you must have seen the fairies,
Last night, on the Cauldon Low.
Then take me on your knee, mother;
And listen, mother of mine,
A hundred fairies danced last night,
And the harpers they were nine.
These are good and kind fairies for Mary explains to her mother that they busied about helping all the local countryfolk, setting things to rights.
W.P. Witcutt, reporting in 1942, suggests that the fairies were connected in Staffordshire belief with Lows, for besides those fairies that danced on Cauldon Low, there were others on Long Low behind Castern Hill who held high revel there on Christmas Eve.