I would translate "tree people" as either "Baumleute" (=
"tree people", literal) or "Waldleute" (= "forest people"),
depending on whether you mean some connection with
individual trees or more with living in a forest environment.
If the emphasis is on a group of people (ethnicity, nation,
species ...), "tree folk" could be translated as either "Baum-
volk" (relation to individual trees) or "Waldvolk" (relation
to the forest).