Do I need to play Fantasy Wars first?
 

I'm considering buying Elven Legacy complete when I get paid on Friday, but I'm thinking that maybe I should get Fantasy Wars first.

Do I need to play FW to understand the single-player storyline?

Maybe a little its connected. U start in the place where u finish Fantasy Wars. But overall i wouldnt say its that much must be. You play different race which u dont play in first part. The races from FW are playable only in bonus mission with no conection to main campaign

FW is better balanced and has a much more tight and coherent story, so while it's not mandatory I would recommend you play it first. It's also a bit easier, or at least the difficulty doesn't go up as steeply.