How I Like My Demi-Human

Not Too Exotic
The term demi-human appears in the Basic Rules (B/X) and refers to those character "races" or species, ancestries, aliens, etc., who are playable as characters, but are not humans. In the Original Edition of the World's Most Popular RPG they include the elves, dwarves and hobbits drawn from the fantastic fiction of J.R.R. Tolkien (and other sources). Hobbits are renamed "halflings" in the 6th printing of the White Box and the term continues to be used up to the present day. The Advanced Game adds gnomes, half elves and half orcs to the list of playable character races and that is the way the game has stood for many years. The Basic Game introduces "race as class" combining several previous ideas about class and the demi-human races (a term first used in Basic), a concept which gamers either embrace or reject, but seldom are they indifferent to.
I am on record as being a devoted fan of the Original Game - the White Box or 3 Little Brown Books where players choose to play either humans, dwarves, elves or hobbits. As referee of my own setting I also prefer to encourage a humanocentric milieu where most (all) player characters are human. This is (in my estimation) for several good reasons which include the following:
1) Being humans, I think we players tend to role-play humans, even when our PC has pointy ears, a bushy beard or hairy feet - we think, feel and react as humans. At some point the "in-character" persona breaks down and we are all role-playing a human.
2) Most of the fantastic fiction I like best, that featuring Conan, Fafhrd and Gray Mouser, and even Harry Potter, are all human protagonists. Non-humans are encountered and give added flavor to the setting, but are generally not the main characters. The work of J.R.R. Tolkien is an exception and likely forms the basis of including non-humans in White Box.
3) I believe the Original Rules encourage human player characters and that is consistent with much of the gamer legend which surrounds its original author(s) preference. Limiting the PC population to humans encourages imaginative creation of diversity within the set of human characters and promoting more thoughtful and believable role-play.
4) Finally, I like to make my non-human NPCs seem as alien as possible so as to increase the wonder and surprise players experience while exploring my "world". It's part of the "magic" of the game as I see it.
Including and embracing all people different from ourselves through our gaming activities should be a goal. An admirable goal...also keeping in mind we are all in reality humans. Diversity among our players, those humans sitting around the table, is absolutely desirable. Players should feel free to explore any aspect of human diversity during the game, but I feel the referee has the right to dictate what non-human races are available as PCs in their campaign. If a player would like to play a "special" character, such as a member of one of the "monster races", I suggest working with the referee to create a "one-off". That is how White Box suggests it be done.
Using a humanocentric PC milieu seems both more genuine and more desirable. The false diversity consisting of elves, dwarves, hobbits, dragon folk, winged faeries, trollkin and so on and on...often detracts from the verisimilitude of the game and misses the point of roll-play - that is to examine the referee's imaginative world through the eyes of another person (your PC), to react "in character" while drawing upon your own experience and to present a realistic portrayal of your PC for the entertainment of yourself and your fellow players.