This discussion may contain spoilers!
Okay, so this is my 2th theory
After reading this post:
I've started digging more on this theory that the Headless Horseman exists in this world, that he's in Fabletown and that he might be the serial killer who killed Faith and Snow.
The proof that he exists
When Ichabod Crane leaves his office, Snow, Wolf and Bufkin search for any register of Faith. When they Bufkin finds the books, Snow says: "Any information on fables in our community will be somewhere in these books". So every fable character in those books are either in the community (except for faith's father, which is dead). There's an image of Ichabod and the Headless Horseman at the right up-corner of the image.
So this means that the horseman does exist in this universe and might be in Fabletown.
The proof that he might be the serial killer Notice what Ichabod said when Snow told him that she'd found Faith decapitated:
"The one who so simply "stumbled" upon this catastrophe on our very doorstep! The last thing i need with Mayor Cole away is a hysteria." Do you know what Hysteria means?
"The fear can be centered on a body part, or most commonly, on an imagined problem with that body part."
See? Ichabod is scared that HE gets decapidated. But why is he so scared? Because the thinks the killer is the horseman. That's why he threatens to fire Wolf and Snow, because he wants him caught. So that mean, Ichabod KNOWS that he's in Fabletown!
And also, there's this:
"I brought you this news i soon as i could!"
"You are trusted to keep thing running smoothly around here! This is a disaster!"
This coversation means that Ichabod wanted Snow to find the severed head earlier, because then he'd have the killer, presumably the horseman, killed. But... why? Why would the horseman kill Faith and Snow?
I think he killed them as a warning the he's coming to Ichabod. Kill Faith to set as a warning that he's willing to kill any fable, and Snow to warn that he's approaching Ichabod (as she's his assistant).
Well that's my 2th theory. Check out my first theory, The Tweedle Theory.