Fantasy traditionalists. Not much different than typical D&D dwarves. Very slow to adapt to new ideas, including technology. Stubborn, direct, and extremely loyal, especially to family. Dwarves love money and are hardworking and motivated in whatever they end up doing.
Dwarves live a little bit less long, around 200-250 years.
Elf-dwarf racism isn't as strong as typical high fantasy, though romantic pairings are still pretty rare (probably mostly due to the respective natural attraction/revulsion to facial hair). It's pretty common to see elf-dwarf friendships in modern cities. More rural dwarves are more likely to be racist against everyone, elves included.
Dwarves are roughly as prolific as humans but tend to be concentrated around some specific geographical area. The equivalent in a city would be a Chinatown or something similar (call it dwarftown or something). The overall real-world racial equivalent to dwarves would probably be Asians, especially Japanese (though much more prolific).
Dwarves don't have a real racial language. Their native language mirrors that of whatever region they happen to live in (many regional languages have roots in the local dwarven languages from ancient times though). Dwarves get their regional language for free instead of Dwarven.
The dominant religion for dwarves is the Trinity. Virtually all dwarves follow Trinity traditions even if they are not devout.
Hill dwarf subrace are usually rural dwarves
Mountain dwarf subrace are usually city dwarves
eg. ignore fluff on subraces
Half dwarf-humans are called "hobbits" (but we'll probably call them halflings)
Half dwarf-elves are called "gnomes"
Elves are long-lived, and like the dwarves are pretty set in whatever was cool 100 years ago. They're much more like Tolkien elves culturally than like D&D elves, meaning that they tend to not understand what the fuck those silly short-lived races are doing. A large number of elves are old enough to have seen real spellcasting in their lifetime. Elves are extremely slow to adapt to technology and tend to dislike things like aircraft, cars, or trains.
Elves love art and individual expression.
Elves form the majority of natives from Paolo, but the continent has become such a huge melting pot that people descended from immigrants vastly outnumber the elves there. Likewise, elves are everywhere in the western hemisphere. They're a bit less common elsewhere in the world. The real-world equivalent to elves would probably be some weird cross between Latin Americans and Native Americans.
The elf native language is Vegan (that's vay-gun, not vee-gun). There are a number of old elven tribal languages (collective equivalents of D&D Elven, Sylvan, and/or Druidic) but they are not used except in elven tribal communities. The likelihood of elves speaking "Elven" is probably about 1 in 5 or so, but it gets a lot more likely if an elf is older. Elves can pick either Elven or Vegan as their free language (Vegan is the campaign language, so keep that in mind).
-High elf subrace is fairly common (most elves), but unless they are PCs they do not get the wizard cantrip (but get some NPC "magically gifted" trait instead). PCs get all normal racial features.
-Wood elf subrace is uncommon outside of Paolo, and tend to live in tribal communities called "refuges." Some modern elves descended from wood elves exist but NPCs tend to not have the special racial traits unless trained. PCs obviously have all racial traits.
-Drow elf subrace is just subterranean elves and have nothing to do with Lolth, they're pretty rare, though more "surface drow" are becoming common since science can solve some of their problems there. Most are from mixed elf-dwarf communities and tend to be less conservative than typical elves or dwarves. Most of dwarven acceptance of things like trains and guns probably comes from drow. Sunglasses exist; you can buy off the light sensitivity with cash as long as you have them on. Note that the hand crossbow proficiency is replaced with pistols (hand crossbows are archaic technology).
The dominant elf religion is druidism/shamanism (basically a Shinto-type belief, with some D&D druid splash).
Half elf-humans are called "velves" (singular velf)
Half elf-dwarves are called "gnomes"
Hobbit / Halfling
Not much to say about halflings other than they are much less nomadic than typical D&D halflings. Again, much more like Tolkien hobbits. Also fuck that lawful good fluff. Seriously?
Not much to say about subraces either.
The native language of hobbits is regional, again. They're half dwarf-vumans.
Hobbit children with most races tend to be the race of the mother, with some traits of the father.
Half hobbit-elves are always hobbits (sometimes with more pointy ears, but not super distinct like an elf's).
"Half-dwarf" is a racial slur towards hobbits (and gnomes).
"Human" is the general term for any non-monster humanoid. The "human" race are called "vumans" (that's "voo-mans" or "vew-mans"). They're boring. Humans tend to be much more adaptive and forward-thinking due to their short lifespans, but this is a trait of hobbits and gnomes just as much, so whatever. They get a feat, so they're the best race. Just pick them.
As you might have guessed, the variant human subrace is the norm, and by that I mean NPCs don't get an actual feat (but probably get some other NPC trait). PCs can still pick normal or variant, but they're still considered vuman in the setting and there's no physical differences other than the obvious from having different physical stats.
Vuman native language is whatever their regional language is, so vumans technically get 2 languages of choice. hax
Half vuman-elves are called velves (singular velf) or more commonly by vumans, "velfs"
Half vuman-dwarves are called hobbits
Half vuman-orcs are usually called orcs (they are still half-orcs genetically and statwise)
They're the blessed of the meddling Dragonwright gods or descendants of actual dragons (typically 1/8 dragon or so). Most are assumed to be dragon-descended. Dragonborn are highly encouraged by their families to find partners of their own species, as dragonborn are very rare and always considered exotic. Most dragonborn families travel a lot; partially due to racism, partly due to the fact that most dragonborn are professional soldiers, and partly due to find other groups of dragonborn. Companies of mercenary dragonborn are a thing, and hella dangerous. A dragonborn that doesn't follow a combat arms profession is pretty rare.
Dragonborn have much longer lifespans (typically in the 200 year range).
Dragonborn racial languages include Draconic, plus whatever its family spoke. This doesn't have to be the same as their regional language.
Half-dragonborn children tend to depend on how diluted the original dragon blood is.
Some children of two dragonborn parents are non-dragonborn, particularly if both parents' dragon blood is thin.
NPC dragonborn don't always have a breath weapon (again, thin blood etc). PCs always do, of course.
The innovators of the world. The longevity of elves and the productivity of dwarves come together to form the ur-race, at least from a cultural perspective. Most gnomes don't get along with their parents or family communities, and tend to move to places where they can more freely express themselves (not that stodgy elven "artistic expression" where only certain things are "real art.") Gnomes are super rare and usually misaken for hobbits. Most gnomes lie about their age after they're past about 70 or so unless they work in the scientific or engineering community.
-Forest gnome NPCs don't have the illusion racial (replaced with NPC magical aptitude).
-Rock gnomes... if you want to play one, let me know and we'll talk about Artificer's Lore. It will probably get you more than just a benefit on History checks. Likewise, you can produce more than the devices listed with Tinker, but anything produced must be similarly useless.
Gnome children tend to be the race of the mother.
Half gnome-elves are almost always gnomes.
Like hobbits, "half-dwarf" is a racial slur against gnomes. Again, most people can't tell the difference between gnomes and hobbits unless the gnome is shooting magic sparks out of his fingers or something.
Velf / Half-Elf
For most people, a velf is indistinguishable from an elf (most elves can tell the difference). The main way to tell a velf and an elf apart is usually attire and demeanor. Velves tend to be much more human-like and progressive, though this is not a hard rule and many embrace elven traditions and culture. Velves are not naturally charismatic, unlike core D&D, because that shit makes no damn sense. They tend to mirror the culture they grew up with.
RACIAL STAT CHANGE: Velf Dexterity is increased by 2 (instead of Charisma) and they can choose two other stats to increase by 1 (as normal).
Velves can pick one of Elven or Vegan plus their regional language (fuck common) and another one of choice (as usual). All other racial traits are the same.
Half-elf is a racial slur, and a much more vulgar one than half-dwarf is for hobbits.
Orc and Half-Orc
Half-orcs are a problem. Orcs are not considered human by most people; Orcish slavery is legal in a lot of countries and orcs are generally not considered citizens. Only vumans, ogres, and orcs can breed with orcs, and the result of orc-human copulation is a half-orc. Half-orcs are a tricky subject, because their skin color is still green or grey even if they were raised in a good Vuman home with good Vuman "parents" (they tend to be bastards of Vuman men and Orc slave women, though the inverse is sometimes true). Unlike the other half-breed races, "half-orc" is more of a compliment to someone of perceived orcish blood, and frequently claimed by half-orcs ("I'm only a half-orc, jerk"). Most people just call half-orcs orcs, because they're all the same thing to them.
Even in countries where slavery isn't legal (most countries in Paolo), people of orcish blood are discriminated against harshly.
Worship of Gruumsh is not really common among half-orcs; most civilized ones worship the Trinity. It's still possible for a half-orc to be raised by orcs (in an orc tribe), in which case Gruumsh worship would be very likely, but that's pretty uncommon since tribal orcs don't tend to breed with vumans.
A huge number of half-orcs are illegitimate slum kids that either die on the streets or grow up to be thugs. In case it wasn't obvious, the real-world parallel for orcs are Africans.
Half-orcs get their regional language plus one of choice (instead of Orcish). You can still pick Orcish if you want but it won't really be useful.
Children of half-orcs and vumans are usually vumans, often with a bit darker skin color than the vuman parent.
"Green" and "Greenskin" are racial slurs.
If a player wants to play an orc (and Savage Attacks is a really good martial racial), it is probably a good idea to be visibly armed most of the time as the extra attention from the cops is probably worth deterring harassment from normal folks. Additionally, if the orc PC is then disarmed for whatever reason, it might be a red herring for the half-orc's actual capabilities.
Tiefling and Aasimar
Just a quick aside. Tieflings and Aasimar tend to be the children of "saints," that is, people touched with the gift of divine power (clerics and paladins). Although warlocks use an arcane power source, they are also capable of producing tiefling offspring, typically via some unholy ritual -- assuming they use a non-fey pact. Most clerics and paladins don't produce aasimar kids, so one is usually something special. Non-spellcasters can still produce tiefling offspring through similar methods as the warlock; draw a circle, have a bunch of participants, spoil a virgin, chant the name of Jesus a bunch, et cetera.
Tieflings tend to be viewed in the traditional D&D manner -- meaning, as freaking demon children, because they are. Aasimar tend to be viewed as blessed, though they can still be alienated due to being different-looking.
Alignment leanings for both are non-existent, although parental influence can play a large part.
Aasimar are pretty nonexistent; tieflings are still rare, but more common since they are a bit easier to induce through prayers to dark gods. Praying to the gods to bless a child and having the gods actually answer will usually result in a cleric or paladin (a "saint") rather than an aasimar. On top of that, the gods don't usually answer or will simply give a healthy child.
NPC tieflings may have NPC magical aptitude rather than their racial spell-like abilities but NPC tieflings may actually have spell-like powers.
As always, there's no common language, so tieflings speak their regional language plus Infernal.
Tieflings can come from any racial heritage. Partial dwarven tieflings tend to be shorter, but much taller than dwarves (in the 4-5 foot range). Partial elven tieflings have elven ears. Obviously, gnome tieflings have both traits. This does not affect their statistics (eg. land speed).