I don't really know much about the movie except that it scared the crap out of me when I was a kid and I want to try find it. I saw it around the mid 90's.

There is not much I can remember about but what I do remember is there was a troll/goblin type thing in it, there was a tree where fellow creatures grew I think, there was a scene in where there was a girl in bed and he appeared next to her, another bit there was a kid on the bank of a creek looking up at the creature and somehow gets turned to wood, something sprinkled on him maybe.

If anyone can help that would be great.

Yeah, it's one of a series of movies... http://www.imdb.com/title/tt0107387/
Hope this is the one...

Thanks, I'll try find it. I just get the feeling though that the creature I remember was much bigger than a leprechaun, human size or bigger

To me it's ernest scared stupid.