The Blue Light (1976)

Hans the farmer is drawn into war as a soldier. Returning from the front, having been defrauded of his pay by his own king, he makes his way home. On his trip, he encounters a witch who asks him to fetch the light from a spring. He keeps it when the witch tries to deceive him and he discovers her foul magic. When the light is ignited, a little man appears who must serve the owner of the light, but it only has power if the owner has faith in himself. His courage bolstered, Hans goes to the king once more to demand his wages be paid.