Welsh legend has it that two young children were out tending their family's cattle on the king's land and found a pair of puppies that they thought were little foxes. When the children took the puppies home, they were told by the villagers that the little dogs were a gift from the fairies. The "wee folk" of Welsh legend used the small dogs to either pull their carriages or as fairy steeds. As these fox like puppies grew, they learned to help their human companions watch over the cattle, a task that would be the duty of their Corgi descendants for many centuries to follow. Should anyone doubt the legend, the present day Pembrokes still bear the marks over their shoulders of the traces of little saddles used by the fairy riders.
Taken from the book A Kennel Club Book: Pembroke Welsh Corgi by E. Hywel Burton