The "green" witch has some roots in Celtic Mythology. Sometimes, witches were depicted with green skin or red hair. Both green and red are colors associated in Celtic tradition with fairies. There has always been a connection between fairies and witches, both being thought of as being not quite of this world. An old description in Britain for a fairy or a human being who was thought to have psychic abilities was "greensleeve" or "green jacket". The association of green with the otherworld was so strong that at one time it was considered unlucky to wear green because it might incur the wrath of the fairies who considered it their own color.
The word witch was sometimes substituted for the word "hag", which met "Holy Woman." However, over time Christianity equated women's power with paganism and demonized anything unchristen, such as the celtic beliefs, hence the green skinned, wart nosed witch.