Dwarves are magical creatures that are associated with age and wisdom. Their pictures almost always are with beards.
They have great knowledge, particularly of craftsmanship. Metallurgy is one of their great skills. They are said to have made some of the great artifacts of legend.
The original concept of dwarves is very hard to get a clear picture of. The sources closest to the original Germanic mythology come from Norse Mythology, but even these are scarce and very varied. Death is a recurring motif in Norse Mythology, and ancestor worship is a prevalent practice.
Dwarves were certainly humanoid, but sources differ over their height, their lifestyles, and their similarity to elves. Early sources indicate the original dwarves were fully human height.
They had become unseen magical creatures like fairies; users of charms, curses, and deceit. Unlike fairies, there is little reference to Dwarf Women. This trend is partly explained by their smaller place in common beliefs: God and Christianity were the main focuses of worship. They had become unseen magical creatures like fairies; users of charms, curses, and deceit.
Late Norse concepts of dwarves were becoming quite different from the early ones. Elves are a race with very close associations to dwarves. 'Alf' is often part of their name. (eg.: Álfr, Gandálfr, and Vindálfr).
The more modern image is short in height and somewhat ugly. The remnants of the original dwarf formed by later fairy tales and folklore (see English folklore, German folklore, and Dutch folklore).
Dwarves are generally described as being about 3 to 4 feet tall, big-headed, and bearded. Some from mythology and fairy tales include:Rumpelstiltskin, the dwarves from Snow White, Dvalin, Lit, Fjalar and Galar, Alvis, Eitri, Brokkr, Hreidmar, Alfrik, Berling, Grer, Fafnir, Otr, Regin (rarely given as Mimir), Andvari (or Alberich).
They were similar to others from the 'Vættir' family, such as elves. As their mythology evolved, the most notable changes have had them become more comical and more mysterious. They adopted the modern image of short height and ugliness. Their associations with the underground became more predominant.
All of this suggests dwarves were a form of spirits of the dead. 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.
Tolkien's term dwarves was changed from the plural "dwarfs", especially when referring to actual humans with dwarfism, but ever since J. R. R. Tolkien used dwarves in his fantasy novel The Hobbit and The Lord of the Rings and the posthumously published The Silmarillion, the plural form has been replaced by "dwarves".
Dwarves in Tolkien are long-lived, living nearly four times the age of man (about 250 years), but are not prolific breeders, having children rarely and spaced far apart, and having few women among them. Dwarvish children are cherished by their parents, and are defended at all costs from their traditional enemies, such as Orcs.
A longstanding enmity between Dwarves and Elves is also astaple of the racial conception.
Female dwarves A long standing source of interest (and humour) comes from the allusion of Tolkien to female dwarves having beards. In addition they are rare creatures. A more cynical, and perhaps more realistic reason for this is that female dwarves (unlike, say, female humans or elves) lack sex appeal and consequently have little mention in folklore.