Basic, BASIC info: Malac started out as Trinimac, an Altmeri god/demi god/whatever that tried to halt the Chimer Exodus. Boethiah, who was essentially inspiration for the exodus, showed up and was like "Whoa, nellie. This ain't happenin', yo," and ate/corrupted Trinimac and changed/crapped him out into Malac, the Daedric lord of the ostracized. After this corruption, his followers, who were normal elves before the Crapping, were changed/picked up the remnant dung and spread it onto themselves to become the Orsimer, or Orcs.
Naturally, the other Lords don't respect Malac as a Daedric Prince; he doesn't have Padomaic origins.