Dwarves are small, stubborn humanoids with long beards. They live in caves, holes and hollow trees. Dwarves work in mines where they delve minerals and metals.
Dwarves are talented with hammers and axes. Tough they are often drunk and are warriors of nature, they are also intelligent, wise and very skillfull with their hands and make the most beautiful, and sometimes magical, objects and structures. In Norse mythology, the dwarves Brok and Sindri made many magical artifacts for the gods, like Thor's hammer Mjollnir and Odin's ring Draupnir. Dwarves themselves are resistant to magic. But some dwarves dislike magic and use technology instead.
Dwarves have long-lives (400 years). They don't have many children and have only a few women.
Dwarves don't like elves - and the feeling is mutual. Elves are tall and beautiful while the dwarves are short and ugly. Elves like to sing and dance while the dwarves like smithing, wealth and sometimes become greedy. Elves eat, drink and sleep lightly, while dwarves eat, drink and sleep loudly and deeply. Elves are thin and agile, while dwarves are stout and strong. Dwarves stay to fight to the death while elves retreat when necessary. Dwarves think about elves as flightly, irresponsible and boring. All those differences made elves and dwarves dislike one another and sometimes declare war. Still, the relationship tends to remain distant; the one don't bother the other because neither wishes to have any sort of contact at all.
Creation of dwarves (from Norse mythology):
"Then the gods set themselves in their high-seats and held counsel. Who would create the band of Dwarves from Brime's blood and Bláin's legs (these are kennings for Sea and Earth)? There Modsogner became the most powerful of dwarves and Durin followed." So it is said in the Völuspá. The dwarves had first been created and had quickened in Ymir's flesh, and were then maggots; but now, by the decision of the gods, they got the understanding and likeness of men, but still had to dwell in the earth and in rocks.
In Tolkien's world, the dwarves were created by the smith Aulë (a vala) before the time of elves and men. Aulë wanted apprentices for the art of smithery, and wouldn't wait for Ilúvatar's children. He then created the seven forefathers of dwarves in secrecy. Ilúvatar adopted the dwarves, but they were not allowed to see the world before the elves, and so Aulë placed them to sleep deep underground and woke them after the elves hade arrived. The dwarves were made to be hardy and stubborn, so as to resist Melkor and later Sauron.
o Trauco - In Chilean myth, a dwarf lives in woods and holes and he is dressed in clothing made of natural fibers. He carries a brunh that he uses like a walking stick which has the power to impregnate young women. After that, he follows them and he appears in their dreams as a good-looking and religious young man. His look can paralyze but if someone looks at him first, Trauco will die. He is also represented as a warlock who reproduces illness (especially for children). If you can get his staff and hit it into the ground, he'll feel the hits. If you put the staff above fire, it will start to distill oil which can be used to cure Trauco's victims.
o Maahiset - In Finnish myth, they are dwarf-like beings or Earth Spirits. They are also called Maanaliset.
o Alfar - In old Scandinavian folklore, they are half-dwarves and half-gods. In later mythology, they degrade into demons that cause nightmares and disasters.
o Dueargar (D&D) - Duergars are dwarven evil cousins who live in Underdark.
o Alvis - his name means all-wise. He forged weapons for the gods and in return Thor's daughter Thrud was promised to him. Thor didn't like the arrangement and had devised a test of knowledge by which Alvis needed to prove that he deserves Thruds hand. But Thor prolonged the test until the sun rose and Alvis was turned into stone.
o Bes - Egyptian god who guards against evil spirits, snakes and misfortune. Later he is known as the god of human pleasures, jollity, music and dance.
o Tom Thumb - friend of king Arthur who is in love with Arthur's daughter and who is loved by the queen of giants.
o Mimir - dwarf who made the sword Balmung for Sigfried (Sagas of Nibelungen).
o Durinn, Dvalinn and Havamal - first dwarven rulers in Norse Mythology.
o The Dwarves' Cavern (In Hasel, Germany) - was once home to many dwarves.
o Harz Mountains (Germany)
o Tyre - In ancient jewish scriptures, the fortress of Tyre was once the home of many dwarves.
o Nidaveliir - one of the nine worlds fixed of the world-tree Yggdrasil according to Norse mythology.