Material here excerpted from research notes discovered in the Tower of the Moon by adventurers, 204 AC. Updates to current statuses by Magus Toriantholas, College of Divination.
In the beginning, the intelligent races were 8 (but really only 7). Each of the Primordial Gods had a servant race, except for Death (who preferred to work alone). After the Dawn War, several of the races split--some moving to the newly-created planes and others remaining on the Material Plane and becoming mortal. Over time, these races changed (degenerated?) into the races we see around us today. I present the family trees of each of the civilized races below, showing from where they descended and how they are related.
A few notes: Boxes colored in red are extinct. Ovals represent groups of related species. Dotted arrows represent degenerate subspecies; red dotted arrows represent intentional mutations. Green outlined arrows represent hybrids.
Servants of Earth
Dwarves are the oldest currently living race. This rankles my fellow eladrin, but my investigations prove it beyond a doubt....Many pages of arguments omitted....It seems that the Titans, Earth's servants, really came in two sizes. One shaped mountain ranges, the other worked inside the earth, forming and shaping the internals. The second type became mortal and settled into the shape we now call dwarves. Very few further changes have occurred with them since.
The giant-kin split into many types--The [extinct ] race of goliaths among them. Hill giants are corrupted stone giants genetically, while cloud giants descend from storm giants. I do not advise telling this to any of them--those big clubs can still hurt.
Messengers of the Gods
Our proud race (the eladrin) are directly descended from the Primordial Good. Our progenitors, the Poslanieki (an ancient word meaning "messenger"), were beings of pure aether who served to balance law and freedom. Those who stayed here on the Material Plane after the Dawn War split into two groups--those who wanted to maintain their connection to the Astral Plane (the Eladrin), and those who abandoned their heritage to consort with nature (the Wood Elves). Editor's note: After the Cataclysm War, the eladrin lost their remaining connection to the Astral Plane and became what we now call High Elves. The Wood Elves also fractured--those who despised civilization became the Dust Elves.
Children of Change
The Nameless One also had servants. No records of their true names still exist, but I call them Proteans--what records do exist paint them as beings who changed their bodies to match the circumstances. They acted as the diplomats--conveying messages and defusing conflicts between the other races. All of them stayed behind and were stripped of their majesty after the Dawn War. They were forcibly changed into a race very similar to modern goblins. In fact, you might say that goblins are more true to their ancestry than their relatives, the humans. Halflings came into existence late, when a few tribes of goblins were caught up in the chaotic energies of the Western Empire's Fall and were locked in an in-between state.
Humans too are descended from these proto-goblinoids. As we all know, they (with a little help from we Eladrin) created the Orcs by mutating humans to bring out the latent bugbear genetics. I believe they were trying to make super-soldiers. Brighter than bugbears and able to breed true. They succeeded, but couldn't control the result. The planetouched (Tieflings and Aasimar) are the result of crossbreeding with angels and devils who have taken physical form. These abominations are very rare, thankfully. Dragonborn are the more recent attempts at creating superior soldiers--these involved ritually infusing pregnant human women with draconic blood. The records indicate that most of the women were not volunteers. These have bred true and are more biddable than the orcish hordes. The colors and elemental affinities seem to appear at random.