Bragging rights, mostly. They're mainly encouragement to play a different style than you might usually do, and sometimes a hint to less obvious bits of gameplay. Some of them pretty much require the player to build a game for that achievement (e.g. having large number of fairy or witch friends required stocking the neighborhood with suitable numbers of same) but a lot can be picked up in regular gameplay.
I enjoy trying to line up as many as I can into a story to play out that is at least somewhat logical, and then trying to get them all as I go.
