Dwarven history starts on Middle-Earth, during the fabled First Age. They believe they were fashioned from stone and given life by the enigmatic Aulë, whom the Elves revere as one of the angelic Valar. They would eventually form seven great Clans from which they studiously track their lineage - Blacklocks, Broadbeams, Firebeards, Longbeards, Stonefoots, and Stiffbeards. Each of these took up territory on various locations on the continent of Middle-Earth, both in Eriador and into the West.
Due to their affinity with stone, they were able to construct magnificent subterranean cities which burrowed deep into the earth. They also were master artisans with metal and jewels, creating magnificent weapons and armor. They also have the strange metal Mithril which was lightweight but stronger than any metal, allowing the craft potent magical devices. People from around Middle-Earth traveled to the Dwarven stronghold in order to barter for these treasures, making the Clans very wealthy.
They also developed an enmity with the Orcish hordes which lived underground to escape the light of the sun. A continual state of war existed between the two peoples, which led to the Dwarven Clans uniting against both Melkor the First Fallen and the Dark Lord Sauron at the end of both the First and Second Ages. When news arrived that Sauron and his Army of Darkness were again on the move, the Clans not only fought on Middle-Earth but joined the battle into outer space.
After the Shadow War, many members of the Dwarven expeditionary forces found themselves on many new worlds. Many of these formed an alliance with Bor the Allfather of the Asgardians, who granted them rights to settle in the Nine Realms, on the system called Nidavellir. There they constructed a giant orbital ring around their star, harnessing the fusion power of the stellar body in order to fuel the fabled Starforges. It is in these forges that the hammer Mjolnir and the sword Excalibur were forged.
In the Fourth Age, the Dwarven Kingdoms on Earth found little reason to trade with the remains of the human kingdoms. Long before the establishment of Indus and Sumer, they had retreated underground, expanding their tunnels far into the Earth. At some point, the Dwarves placed themselves in hibernation, locking themselves in ancient caskets which magically kept them young in eternal slumber.
Occasionally, some Dwarves would emerge to engage with the world of humans. The most notable instance was in the Märchenwald in Germany in the 16th Century, when a small group belonging to the Stiffbeards Clan, aided a young lady from escaping the clutches of an evil noble-woman.
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