This discussion may contain spoilers!
Conspiracy Theory from the beginning: Faith has been prostituting herself for quite some time. Having the same dilemma as Beauty and Beast, she was used to having lavish lifestyle with prince Laurence. But that has been striped away since the invasion of the Homelands and moving to the mundane world. In the beginning she did her best to go to Snow about help, but was constantly turned down for the more important (wealthy) fables. She learned of a man who did get out of the homelands with his riches intact and just so happened to be giving out loans. As her loans increased with no way to take pay them back, the Crooked Man gave her an ultimatum. She works for him or he kills Prince Laurence. Faith is still in love with Laurence so she has no choice but to accept the Crooked Mans proposition, and reluctantly does the job.
The toll starts to take affect, she quickly finds out that not only is she doing prostitution, but slave labor for blackmarket glamours. Prince Laurence is falling into a depression after finding out and shunning Faith over her line of work, which in turn causes Faith to move out. Her world is crumbling because both The Crooked Man and the Fables Office have failed her.
One fateful night, Lily asks Faith if she would be willing to cover a shift for her. Faith does this, but ends up getting beat by the client over payment. Which is where she finally meets the fable that doesn't abide by either system, Bigby Wolf. She knows right off the bat that if their is anyone to trust in Fabletown, it's him. Despite whether or not she has the money, she goes back to the Puddin' n Pie (safe under the keg will have your 57 dollars if you paid her). Bruised and feeling betrayed by Lily for sending her into that bear trap. Georgie can't have a girl looking beat to shit working so he decides to send her home. Escorted by Vivianne.
As she is going back, she asks if she could go check in on Prince Laurence. Vivianne allows this. As they walk into the apartment, shock and horror befalls Faith as she sees Laurence with a gunshot wound, lying "dead" in his chair. "The Crooked Man killed him" is what she thinks and knowing that Vivianne works with the Crooked Man, Faith grabs her magical dagger and stabs Vivianne. Killing her.
After her momentary insanity, Faith sees that Prince Laurence is in fact still alive. She realizes now just what she has done. She knows that the Crooked Man will kill both her and Prince Laurence for this. So she comes up with a plan. Faith makes Laurence swallow more sleeping pills, which will make his memory "fuzzy". Then, she goes through her purse and grabs a picture of all the girls at the Puddin n Pie and some Glamours that she stole while doing her labor work. She Glamours herself to look like Vivianne, and Glamours Vivianne to look like her. After this, she takes off the ribbon which cuts off the now Glamoured Viviannes head. She knows that if the body is found, so will the Glamour and the stab wound since the glamour does not conceal wounds (as shown by Lily), so she hides the body. However, she wants to get back at the Crooked Man for everything that he has put her, Prince Laurence, and the girls at the Puddin' n Pie through. She needs help however, so as she goes back glamoured as Vivianne she pulls Nerissa aside and explains everything that has happened. Nerissa helps Faith hide the body, and it is Nerissa that puts the head in front of the apartments. As she climbs over the fence, a part of her dress gets ripped off.
The snowball effect has begun. The head is found, The Crooked Man has lost an employee and money, and his underground operation will be revealed. So he sends the Tweedles to find out who is responsible for the murder of Faith. They search the last place she was known to be (Woodys), and the most likely place Faith would go (Laurence). So when Tweedle Dee tells Bigby they are looking for the same thing, he wasn't lying.
The Crooked Man knows that war is brewing and that he will be found out. So instead of hiding, he decides to tighten his grip. Ichabod has been embezzling from Fabletown for years because of his lust for Snow. Crooked Man takes advantage of this, and tries to put the spotlight on Crane for a while. Having Bloody Mary take pictures through the mirror while Crane has his way with a Glamoured Lily who is likely under a sleep spell for Cranes fantasy. After this is done and Crane leaves, Mary easily kills a sleeping Lily. The murder of Lily was a means to lure Bigby away, and frame Crane for the murders of Faith and Lily. So Mary and perhaps one of the tweedles wait until they see one of the toads swimming in the pond. They want the body to be discovered so they dump it in there, Mary gets quite a laugh out of this.
The Crooked Man then holds Crane captive so that the case will remained solved but the suspect will have gone missing, but Crane doesn't want to be indicted on murder. So he escapes their custody and desperately finds a way to reveal his innocence. It wasn't until Crane was captured by Bigby and Snow that Crooked Man was forced to reveal himself. Crane knew to much of the Crooked Mans operation and how it ran. He couldn't let him spill the beans.
I apologize for the length of this article, but I felt that it was important to let you know the backstory. I am missing plenty of details. I would be happy to answer questions or comments to the best of my ability. Thank you for sticking around and reading my post.