If we explored the REAL folklore for elves and dwarves and such, we'd find plenty of color and flavor.
A few RPGs that use a historical base (as in the middle ages, but Dragons and Elves were real, etc.) provide very rich and interesting versions of elves, etc.
I used to run a RQ campaign set in Ireland, and drew on the old celtic myths and legends. The players found the setting very rich and colorful, more so because they had no knowledge of the setting or the stories I was drawing from.
Fortunately, Chasoium rarely publsihes the waterd down generic fantasy cultures.
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