I'm posting this early because it's extremely important: Mostly because it's really, really different from vanilla D&D, which is the fantasy most people associate with RPG. The post is in-character.
Magic in this world is rare. Extremely rare. There have been perhaps a hundred great wizards in the history of the world. Most magic-users are hedge magicians, those who know enough magic to help the crops grow, and to improve the healing qualities of herbs. Ancient stories tell of a race of wizards, but we have never had a reason to believe they ever existed.
As for the dwarves, the elves, and the gnomes; who knows? They keep to themselves, mostly. Stories of these old races exist, even contemporary sightings and meetings. A young man, four years ago, told me that once he had been trapped in the mountains when a storm hit, and he fell off the edge of the path and was knocked unconscious. He was nursed back to health by a sturdy, stone-grey man: A dwarf, as I have come to know them in my researches. An old woman, after the death of her husband, was unable to farm her fields, but she awoke one morning to find her seeds sown and all her wine missing. She followed a trail into the forest, and found the remains of a wild revel around a campfire. Though I do not know for sure, this sounds to me like the elves.
These sightings and other magical events have been increasing in frequency every year. Perhaps magic is returning to the world. Perhaps the ancient wizards have returned. Perhaps the elves and dwarves are becoming less frightened of our mundane world. I cannot explain it, but I will continue to study it for as long as I live.