Demihumans

Thoughts on Fantasy Race
Elves, dwarves and hobbits, who together with various human peoples, oppose the evil forces of Sauron in J.R.R. Tolkien's Lord of the Rings trilogy form the player character races in White Box. In life, it seems timing is everything and at the time Gary Gygax and Dave Arneson were creating their White Box, the works of J.R.R. Tolkien were becoming very popular, so popular that according to gamer legend, Mr. Gygax was pressured by players to include the Tolkien-esque races despite his own preference for human PCs. Later editions of the game call these the demihuman races.
I have always struggled with demihuman PCs, mostly because I think they should be more odd and fantastic than most people play them. In the boardgame Dungeon! by David Megarry, (who I believe also gamed with Dave Arneson) playing the elf character gives a bonus to finding secret doors and only needs 10,000 gold in treasures to win the game, otherwise the elf plays the same as the wizard, the hero and the superhero. The elf is just a playing piece with specific rules that set it apart. I think this is the way demihuman PCs are often seen by those playing them in pen & paper role-playing games.
Taking on the "role" of a non-human and trying to make it seem different and alien from humans is more of a challenge. Ultimately, demihumans may end up being played much like human PCs except with pointy ears, or a beard. After all, we players are human with limited ability to be otherwise. As a consequence, I prefer humanocentric milieux both as a player and as a referee. As referee I like to characterize the demihuman as having an alien personality and motives that often defy understanding, thereby making them an adventure to interact with. The imaginary races seem to lose their fantastic element when they become PCs.
Richard Snider has a rather unique take on elves and dwarves in his Powers & Perils game. The game is set in what Mr. Snider calls the middle world which is most similar to our own ancient/medieval world and lies between the upper world of the gods and demons (heaven, hell, etc) and the lower world of elves, trolls, faerry, etc. The lower world predates the sun and is a land of perpetual twilight. Humans may visit the upper world or lower world and occasionally denizens from those worlds may enter the middle world, and interact with humans. I like this idea.