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Inspired by a conversation with Varg in the Chatbox...
SourceThe original concept of dwarves is very difficult to determine. The sources closest to the original Germanic mythology come from Norse Mythology, but even these are scarce and varied. Sources have gradually given dwarves more comical and superstitious roles. Dwarves were certainly humanoid, but sources differ over their height, their lifestyles, and their similarity to elves. Considering early sources, and considering the dwarves' nature, original dwarves seem fully human height. They had strong associations with death: paled skin; dark hair; connections with the earth; their role in mythology. They followed animistic traditions, showing similarities to such concepts of the dead. They were similar to others from the 'Vćttir' family, such as elves.
Also, so we can dispense with any silliness regarding "dwarves" vs. "dwarfs"
SourceThe plural form dwarfs has been traced to the 17th century. The alternative plural dwarves has been recorded in the early 18th century, but was not generally accepted until used by philologist J. R. R. Tolkien in his fantasy novel The Hobbit. Neither spelling represents the regular phonetic development of the Old English plural dweorgas, namely dwarrows; rather, they descend from a new plural formed in Middle English from the singular stem. Similarly, the old inherited plural dwarrows acquired a singular dwarrow. Although dwarrow has passed from the language, both dwarfs and dwarves are in current use. Many grammarians prefer dwarfs; many fantasists prefer dwarves. The form dwarfs is generally used for real people affected by dwarfism; the form dwarves is used for the mythical people described by Tolkien and others.
Now, regarding their origins, in Elves, Wights, and Trolls: Studies Towards the Practice of Germanic Heathenry: Vol. I (p. 81), Kveldulf Gundarsson writes:
Regarding early conceptions of Dwarves, Wiki says:Like the Dark Alfs, the Swart Alfs are closely associated with death, and may in fact often be dead folk themselves, as the names Dainn (a dwarf-name as well s the alf's ruler, meaning "the dead one"), Haugspori (Howe-Treader), Nar (Corpse), and Blain (blue/black--cf. "Hel-blue", a common description of corpses, especially undead ones) suggest. Snorri mentions in Snorri Edda that the Swart Alfs are black as pitch, but this may well be his own understanding drawn from the name. In Alvissmal 2, Thorr comments on how pale the dwarf Alviss is, and asks if he has been with a corpse in the night. In Norwegian folk belief, dwarves sometimes appear to be black or dark in the face, but most often they look like grey bearded Northern Europeans. However, the black face is as typical of the dead as the paleness Thorr remarks on (helblar--Hel-blue/black).
Early Dwarves
Sources for the earliest concepts of dwarves are essentially non-existent. Norse dwarves (dvergar) are the earliest source for our understanding of original dwarves. However, the concept of Dvergar mutates rapidly, even during our records of Norse Mythology. This makes it hard to draw a uniform concept of early dwarves, and questionable whether there actually was one.
For most of Norse mythology, the skin color of Dvergar was 'pale' (fölr), like a corpse. The hair color is 'black' (svartr). The Norse depiction of the deathly complexion of Dvergar resembles the modern depiction of vampires, with early dwarves fatally susceptible to sunlight. Dvergar are skilled craftsmen, and most of their magic involves labour, craftsmanship, and metallurgy. They are a family of Vćttir, or nature spirits. From the later information on dwarves, from similar mythical creatures, and from the nature of Germanic mythology and its roots, we can get a good idea of early dwarves. Elves are a race with very close associations to dwarves. 'Alf' often appears as part of dwarf names (eg.: Álfr, Gandálfr, and Vindálfr), and dark elves have deep parallels with dwarves. Elves are often described as humans elevated after death, and descriptions of them often have them passing through physical objects. Other Norse creatures and Vćttir have similar connotations of death. Trolls are deathly creatures who rise from beneath the earth and often require to be put back to rest. Nisse have the same labourer image as dwarves, and they lived in burial mounds. Death is a recurring motif in Norse Mythology, and ancestor worship is a prevalent practice in animistic religions. 'Dvergr' is very similar to 'draugr' (a spirit of the dead in Norse Mythology). Norse mythology has images such as the dwarves growing from maggots from Ymir's flesh and the inevitable murder that comes from a dwarf weapon. All of this suggests dwarves were a form of spirits of the dead.
Dwarves seem to be associated with age and wisdom. They are consistently pictured with beards, and have great knowledge, particularly of craftsmanship (a major occupation in Norse society). The connection between the elderly and death helps strengthen the link between dwarves and spirits of the dead.
It's worth noting that nothing points to early dwarves' short height. Short dwarves only appeared around the 13th century, in sources such as the legendary saga, and it became a trend for mythical creatures (see: fairies; elves; gnomes) to be small, such that they gained a mischievous and comical nature. Given the dwarf's association with dead humans, it seems unlikely for them to have been anything but human height, and any shortness they have would be a characteristic of old age. With the oldest sources depicting dwarves as human height (see Norse dwarves), early dwarves most likely were.
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