Leprechauns are the magpies of the dungeon.
Leprechauns will attempt to steal any golden item — such as lamps, gold rings, plumed helms, gold potions etc. — that the character is carrying. They run away immediately afterwards, using their teleport ability sooner or later. Leprechauns do not attack in any other way.
Leprechauns steal from the inventory. Golden items that were put inside a container are safe from their prying fingers. If there is nothing for the leprechaun to steal, it will simply stand still in front of the player, allowing him to be easily dispatched.
Since leprechauns are quick runners a means of ranged attack might help you.
When a mortal blow is stuck on the leprechaun it will plead for mercy: Please don't kill me! I'll give you my pot of gold!. You can choose to have mercy or kill it. If you are telepathic you will sense if the leprechaun is trustworthy or not. The insight will appear in the mercy-or-kill-dialog. Quaffing a potion of monster detection before attacking a leprechaun could be good for your conscience and maybe your income.
If the leprechaun is hit too hard it will be slain without the plea for mercy as if you had choosen to kill it.
Sparing the lives of leprechauns will be rewarded by the leprechaun king.
Sparing the life of an untrustworthy leprechaun will leave you with his taunting laughter but nothing else. Everything he might have stolen from you is lost.
Teleportitis is one of the Wazhack pathologies.
A Leprechaun King may appear when a large pile of mushrooms are dropped (verified with 25 toxic mushrooms). Killing it will reward the player with a crown and a large amount of gold. Having spared leprechauns (needed: how many?) will instead make him grant a favor.
When slain, it may drop some gold, as well as a piece of leprechaun innards.