Dwemer, the ES's Dwarf race equivalent, were actually just bearded Elves that lived in Morrowind, Skyrim, parts of Hammerfell and a few other provinces several thousand years ago. They were the most technologically advanced race, using Arcane Magicks to create living, steam-powered technology and automatons.
They wiped themselves out and literally became the golden skin of a giant robot golem that eventually exploded and was lost in the dragon-break caused at the end of Daggerfall.
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Also to point out, they looked like http://www.imperial-library.info/sites/default/files/tdgtd_dwemer_image_01.jpg, http://www.imperial-library.info/sites/default/files/tdgtd_dwemer_statue_04.jpg, and http://www.imperial-library.info/sites/default/files/tdgtd_dwemer_ghost.jpg. In addition, the dwemer, or "dwarves" were roughly the height of an Imperial. The reason they were called "Dwarves" is because the giants that first found them saw them as being tiny in comparison. Also to note, the name "Dwemer" or "Deep Folk" has two meanings, in that they did live largely in underground castles made of a brass-like material, but also because they were deep thinkers.