The great Celestial Dragon, Aurrhou, created the dragons to drive away demons, giants to bind the elements and fairy folk, elves and goblins, to manage nature. Of all the children of Aurrhou, mankind is the most curious. Man seems to have no purpose other than test the patience of all else in creation.
The trouble stems from the one thing that is unique to the species: the soul. All other spirits, whether immortal fairy or mortal beast, are bound to their creation. It is what it was made to be and can be nothing else. Only man can change. Only man can choose. This is the effect of that divine spark called the soul.
Long, long ago, before the God War, a very few souls were made for fairy folk, copied from those of men. These few souls gave their bearers the ability not only to choose, but to breed with mankind. The first half-breeds were terribly powerful individuals, the rivals of any elven lord. Over time and many generations, their blood has thinned and spread.
The races in the Player's Handbook, in this setting, represent humans that still have strong supernatural traits. All are technically human, however.
Elf minimum Dexterity 13 maximum Constitution 13 otherwise as is Gnome minimum Constitution 13 maximum Strength 13 otherwise as is Half Elf as is Half Orc minimum Strength 13 maximum Intelligence 13 maximum Charisma 13 otherwise as is Halfling minimum Dexterity 13 maximum Strength 13 otherwise as is Deep Dwarf as is Aquatic Elf minimum Dexterity maximum Intelligence 13 otherwise as is