I've been thinking off and on for the past five months or so about how limited many fantasy authors keep their races. There are Elves, Humans, Dwarves. They each live in their own little region (humans the wide world, dwarves mountains, and elves the forests) and have their own culture and marry their own kind. Occasionally you may see a half-elf half-human hybrid, but that's it, and only when a "normal" character with "special talents" is needed. The same issues apply to more creative authors whose races are the Kalians, the Tuaseans, and the Maelkenoi. They still live in their own regions and interact with only each other as completely homogeneous groups. In reality these are all more like separate sentient species than they are races. Disagree? Let's look at races in our world.
The main issue with defining race is that it's not exactly a scientific term. Scientists group things all the way down to species, and even to subspecies, but that's as far as they go. So they're no help in this discussion, but linguistics may help us a little. The word race is used in two major ways in the English language. First of all, we're all part of the "human race". This grouping is what scientists designate as the species homo sapien. Now, I'm not trying to push evolutionist ideas that we're all nothing but intelligent animals, but I do think it fairly accurate to say that mankind is physiologically different from other creatures on earth. In short, we're are our own species.
The second use of "race" is the one most people commonly think of when they hear such words as racism, racial profiling, etc. Most immediately associate this with skin color, but it truly goes a little beyond that. For instance, Hispanics are very similar in skin color to Middle Easterners. And people in India have similar pigmentation to that of those in the Pacific isles, but rarely are these races confused. For instance, Oriental heritage is usually associated with not just skin color, but also with facial structure and height. The Aborigines of Australia have black skin, but they're not confused with those of African descent. So race in the common use refers to noticeable physical differences, including skin color. I'm assuming that it is from this use that fantasy "races" are dubbed such since they generally look similar except for certain physical differences. But what I'd like to point out is that all of the races on Earth are still members of the human race. I guess another word that would work well for this meaning would be "breeds" like is used when discussing different types of horses, dogs, etc.
But as I'm sure we've all noticed, skin color and other features do not come close to making people the same. African Americans are far different from people in Africa of the same race. Why is this? One word: culture. Some would throw in nationality, but generally the two are very closely related, except for those nations which house separate cultural groups. So even members of the same race are not all the same. And then you get into how members of the same culture differ from one another...
So that's races in our world. So are fantasy races, which usually have their own origins and homogeneous cultures, really races at all? My thoughts (which are by no means authoritative). Mimic the human race and have races within your races. Have dark-skinned elves that live in hot climates, and brown-skinned elves that live in equatorial climates. And let the variety of their habitats carry over into their cultures. If group X of elves lives in the arctic and group Y of elves live in the temperate forests further south, they shouldn't have identical cultures.
I use this idea on my merfolk races in my world of Fantasia (which I desperately want to rename). They are all essentially one race, the merfolk race, but there are several different races of merfolk, there are the Formors which live in the dark depths of the ocean and the Merrows which live in the kelp forests closer to the surface and a race of merfolk that inhabit the colder waters of the arctic regions. They're all merfolk and all share common lineage, but each is its own race. I haven't quite finished working all of this out, I may come up with some more before it's all said and done. And those are just the sea-dwelling races in Fantasia, not to mention the freshwater races and the land dwellers

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In Christ,
Jordan