Dwarves

"Gold is the gift of the mountains, but iron comes from blood and bone." Dwarven Proverb

Dwarves are the stout folk of the mountains. They average around 4-1/2 feet tall, but they are as heavy as some human adults. A male dwarf values his beard, grooming and styling it carefully. A female dwarf prizes the hair that grows on her head as much as a male dwarf prides himself on his beard. All dwarves value gold and other precious metals, gems, and mineral wealth. In Khorvaire, dwarves inhabit a mountainous nation they call the Mror Holds. The Mror Holds were once part of the Empire of Galifar, but the area seized its independence during the Great War .
Twelve major Khorvairian dwarf clans compete for supremacy in the Ironroot and Hoarfrost Mountains. They feud using money and influence rather than the axes and shields of their forebears. Clan Kundarak, now House Kundarak, claims neutrality in this complex game, but it holds the greatest amount of power.
The Dwarves claim to have originated in the Frostfell, living as barbarians, plunderers, and sailors. No one is sure what drove the dwarves from their homeland but Dhakaani dirges speak of battles with the "stonefolk of the mountains," and the Dhakaani were repelled from the Ironroot Mountains by a unified, disciplined dwarvish nation as long ago as -12,000. After defeating the native Jhorash'tar minotaurs the Dwarves entrenched themselves and mined deep into the earth, abandoning the seafaring ways of their ancestors.
The dwarves themselves have many tales from this age of glory, though it is difficult to separate fact from myth. Tales speak of Stone Kings and Dragon Keepers, of runesmiths forging mighty blades in the depths. This age came to an end in the reign of Lord Kordran Mror. A number of warriors and heroes had stirred up unrest in the deep realm, and Mror banished twelve of the leaders plus their followers to the surface of the mountains. The depths were sealed off with magical wards and a clan of wardens, the Kundarak, sent to the lands above to ensure that the seals remained until the others "proved themselves to be worthy of the kingdom below."
The dwarf lords took many steps to prove their worth. It is said that the great stone face of Lord Mror was produced at this time, though this is itself a point of some debate. Korranberg sages claim that the dwarves simply didn't have the skills to produce such an artifact, and argue that they must have sculpted down a larger image. For evidence, they point to obscure references to "the face of Khyber," and suggest that "Dragon Keeper" may have referred to a draconic monument dating back to the dawn of time.
In any case, when none of these efforts produced results, the banished dwarves fell to fighting among themselves. The culture slowly devolved, and while the surface dwarves clung to the secrets of iron, they embraced the grim joy of battle. For thousands of years the clans fought one another, each seeking to prove its ultimate superiority and earn the keys to the kingdom of stone.
When humans first came to Khorvaire, they ignored the feuding clans of the Ironroot Mountains. The dwarves were too busy fighting one another to take an interest in the world beyond the mountains, and the ancient battles continued unabated until Karrn the Conqueror cast his eyes toward the region. The young prince guessed at the wealth that might be hidden in the mountains, and he wanted his share. With his father's permission, he led an army to subjugate the "mountain barbarians." Though (or perhaps because) they had been fighting for millennia, the dwarves were ill prepared to face an unfamiliar foe. Together the clans could have easily expelled the invader, but Karrn played on their feuds to divide and conquer the clans. Within a decade, the clan lords had bent the knee to the prince of Karrnath.
A thousand years later, having freed the goblins in his conquest of the Five Nations, King Galifar was not about to condone dwarvish slavery. His son was instructed to bring the King's Peace to this savage land. The dwarves were forced to stop their warring ways and encouraged to develop a new nation based on the model of Galifar, providing tribute to Karrnath and the old kingdom. The Karrnathi surveyed the mountains, but they could not pierce the ancient wards, and they drew their conclusions from the veins of ore they could reach.
Decades passed. Many dwarves abandoned their old ways and spread across Khorvaire. Those who remained in the mountains grumbled under the burden of tax and tribute, and slowly their discontent pushed them together.
Then came the summons. The dwarves of Kundarak were the keepers of the wards, and they called the lords of the twelve clans to their hold. In the halls of Korunda Gate the clan lords met in peace, discussed their plans for the nation, and expressed concern about their future in the Empire of Galifar. After a few days of talk, the Patriarch of Kundarak led the leaders down beneath the holdfast to one of the ancient wards. "At long last, you have set aside your differences," he said. "Step forward, and open the gate to the kingdom below." As twelve dwarves touched the seal, it faded away, and the path to the past was revealed.
What lay below was a shock to all. While the clan lords battled on the surface of the mountain, the descendants of Mror had delved too deep and tapped into the Abyss, unleashing hordes of dæmons. There was no glorious kingdom of noble dwarves awaiting their return, only ruins and shadow, with terrible monsters lurking in the darkness. Only the corrupted Duergar remained of their ancestors. Slowly the dwarves reclaimed the ancient fortresses and the fortune hidden below.
Now that its ancient duty was discharged, clan Kundarak -- which, with the aid of the Zil gnomes had established itself as the largest bank in Khorvaire, was drawn into the Twelve. Many of the other clans worked with Kundarak, selling their ores and jewels through the bank or serving as guards and enforcers.
Through all this, the dwarves remained citizens of the crown of Galifar. The dwarves were patient, and most placed great stock in their word and the honor of their ancestors; the clan lords of the past had sworn an oath to Galifar, and it was not the place of their children to break that vow. Even though Karrnath raised taxes, the wealth of the deep mines far outstripped this tribute. Many of the dwarf lords called for rebellion, but the clans could never come to an agreement, and no single clan wanted to act on its own.
Then came the Great War . The dwarves had sworn an oath to Galifar, but that empire no longer existed. Never again would the dwarves submit to the rule of a single king, not even a dwarf. They declared the birth of a new nation, a formal alliance of the clans that would one day rival the kingdom of old: The Mror Holds. The Dwarven clans also battled amongst each other over riches and power until Galifar imposed peace on them. Still, despite this, grudges remained and so the aggressions continued except now in the form of espionage and sabotage.