Kool story I know. But still someone please give moar lore to confirm this for me a bit more.

Orcs is short for Orsimer. The suffix of Mer denotes of elven lineage. Also known as the "Pariah Folk".

Read more about it here. http://www.uesp.net/wiki/Lore:Orc

Hence the pointy ears.

There are daedra, dunmers, eating, and pooping which may or may not be literal.

Like the Dunmer who also live in the North separated away from the southern Elves (Aldmeri Dominion), they were changed by Daedric forces. The other Elves of the north are the Falmer who are also changed from their original form but by Dwemer influences rather than Daedric interference.

For some reason I read this backwards at first.

Orcs are elves, the first reply confirms this well enough.

Something I like to think about though, is the average life span for an Orc. There's evidence that elves can live for over three hundred years... I wonder if that includes Orcs. Food for thought, I suppose.

*Update*

Not average lifespan, longest lifespan. Sorry.

Falmer, by the 'mer' definition are also elves. But how far are they removed from their original Elven heritage? When do they become something else?

Since I played the earlier TES games where Orcs were considered monsters and a kin to Goblins, I still have a hard time considering them Elves.

There is no real reason that they shouldn't. I think they may live shorter solely on lifestyle rather than genetics.

They had a curse thrown onto them by Shor. Thats why they have shorter natural lifespans than other elves.

and where is this said? just looked on the UESP and there is nothing about Orc lifespans at all that do not come from a book that has a possible bias.

I also assumed they were short lived, but that may have been from my knowledge of them in D&D.

They may only be short lived as they desire a warriors death so much.

This is how I see it, they're corrupted versions of their former selves and they no longer call themselves "Orsimer" nor does Malacath. It's just like how Gelebor no longer considers the Falmer to be Snow Elves because they're corrupted versions of their former elven selves.

They seem to have written in this bit of extra elven lore long ago as you're right that they were considered a sort of Goblin in the older games. I blame the madness of MK

To put it simply, any race with its indigenous name that ends with mer is an elf: Altmer, Aldmer, Dunmer, Bosmer, Dwemer, Falmer, Maomer, and Orsimer are all known elves. Exceptions are Ayleids and Left-Handed Elves.

Elves created orcs. But I think you are going by skyrim not myth

It was Tolkien who created Orcs for LOTR.
Tolkien borrowed Elves from Germanic mythology. He was trying to create a story of fantasy that taught the Bible. Elves were symbolic of Angels and Orcs were I think meant to be fallen angels who followed Satan and became demons. In LOTR I think Orcs were created from elves. I could be wrong.

If Orcs were from Elves in LOTR which was the original use of them then Bethesda were probably staying closer to that than other fantasy games.

In Germany mythology they didn't have orcs but had dark elves. They were said to bring misfortune on man and Earth.