Do you need a business license to sell homemade crafts at a vendor fair?

No you do not. I sold pottery and homemade Christmas ornaments at a vendor fair and I didn't have any license.

You will have to check the laws for your community, state and country. In some cases there is no requirement, but you may need a temporary permit. In others as long as the taxes are paid, it is okay. Check with your local government to find out for sure!