Ugh. That is ridiculous. You can't redefine a basic term like dwarf.
Giant? That's just a regular guy, and how tall he looks compared to a chicken.
Dragon? That's just what we call people with red hair.
...
(inb4 "you didn't play Morrowind" and "how dare you you blaspheme TES lore")
Yes, they can.
Easily, actually. In fact, they just did it. And there's nothing you can do to stop them, because there is no defined term for dwarf.
Sure, Tolkien and those who copied them made them hardy, drunk, stereotypical, short [censored]s that live underground, dig holes, and do [censored] like that. Bethesda decided to not copy everybody else and made their dwarves creative and original.
For that, I commend them. There's nothing worse than exact clones of other fantasy worlds.