I understand that fae and humans are the two groups. Then there are the lesser fae, an undergroup of fae, like the Illyrians.

Illyrians have round ears, a bit of magic, and wings.

So why are humans not just considered lesser fae, but are the kind of opposite of fae? They use magic as well, at least the queen sisters have magical wards in their castle or whatever, so it's not the complete absence of magic.

My explanation is just that the reason for this distinction is purely historical and doesn't have any objective truth in it that humans and lesser fae are intrinsically different.

Another explanation would also be that Maas wanted us to feel the otherness of fae and if humans belonged in that same category it wouldn't hit as hard. But that's too behind the curtain for me.