Start by painting the rim of the clay pot(s) with a few coats of acrylic paint. Let dry.
Choose another color and paint the base of the pot. Don't worry about the bottom of the pot; it won't be seen.
Choose the unfinished wood pieces that you'd like to paint to decorate your house. Paint any embellishments with acrylic paint and let dry.
Paint the saucers of the pots with coordinating colors. I recommend painting the larger saucers green to match the moss. Add dots with spouncers to turn them mushroom themed, if desired.
Cut a piece of moss to fit the 10" saucer. Do this by tracing the bottom of the pot onto the back of the moss, if it's a sheet. Glue moss down with a waterproof glue to cover the base.
Use E-6000 or another waterproof glue to attach the top of the fairy house to the bottom of the pot. Then place a ring of glue around the top of the clay pot and put it down on the base (into the moss). Let dry for several hours.
Add embellishments like small wood circle steps with the waterproof glue. We also placed gnomes, but we didn't glue them down because we want to be able to change those out to various animals, fairies, etc.
Give the houses a few coats of Outdoor Mod Podge (minus the pieces that will be moved). Let dry before placing outside.