As we rebuilt Telrhin a few years back, the impulse was a full embrace of nostalgia. The whole panache of beloved geek fantasy from our gaming years. But there comes a time to de-elf the world. We may have re-invented everything top to bottom in Telrhin Mark IV, but the old names were still there, ripe with stereotypes and the stolen ideas of others before us. The backstory to the "older" races was re-imagined, history re-thought, origin myths re-invented. But as soon as someone hears the world elf, that's all out the window.
"Origin myths are just tales, unprovable and contradictory, and in that rich fog of uncertainty the backstory of cultures has room for so much more than the limits placed on them by being 'elves'..."
Now before you roll your eyes at this seemingly cosmetic (and blasphemous) change, you should know that I did the same when game worlds attempted to differentiate themselves by giving other names to what were obviously elves and dwarves and orcs. Why bother? Why cloud the issue? They're still elves and dwarves, pilfered from Tolkien, and carrying the baggage of a thousand other fantasy worlds. Baggage that gives them an instant identity, but also belittles any uniqueness they might have in favor of a two dimensional cut-out.
Mark IV still has "older" races, but the mythology has evolved and the reasons have changed, and calling Telrhin's dwarves 'dwarves' and elves 'elves' no longer fits the bill. In some ways this is like calling a magus in Ars Magica a magic-user -- the term conveys context that does not actually apply.
In Telrhin there's an evolution from a mythological origin of dreams to the present, more concrete reality. In that world-myth creatures evolved, and so did many of the "later" races much like on Earth. Origin myths are just tales, unprovable and contradictory, and in that rich fog of uncertainty the backstory of cultures has room for so much more than the limits placed on them by being 'elves'.
So no more elves, no more dwarves. And with that comes a clean, new story.
A lot of worlds do this just
A lot of worlds do this just to sound original. It adds a barrier to new players while they get their bearings: it's much easier to toss them into a world they're already a familiar with, complete with orcs and elves and the rest, it's part of why the fantasy genre is so popular. But I agree it's also "generic" and take away from the world story, and makes it harder to change assumptions (everybody thinks they know what elves look like and believe).