Elven Era (10,000 to 1,022 BF)
The elves and dwarves were created by the gods Sunny and Loony, respectively. There are two prevailing myths surrounding their arrival:
One day, as Sunny sat in her throne room, a portal opened to another world. Nobody knows why it appeared, but Sunny’s curiosity got the better of her and she wandered through. On the other side was a fresh realm, Earendel, ripe for civilization. She created the desert elves to worship her, and set them on the path of civilization, giving them powerful Magic.
At the same time, her brother Loony had the same happen in his throne room. He passed through and found Sunny at work. Not to be outdone, he created the Dwarves and gave them advanced magic as well and extensive engineering knowledge.
Some details change with each telling of the story, but this is the prevailing theory of Elf and Dwarf Scholars.
The other theory is that Sunny and Luna are the children of the god that created the world, giants, and dragons. This is the prevailing theory of human scholars.
The elves and dwarves lived along side each other peacefully for nearly the entirety of the second era, with occasional border skirmishes and trade disputes. In -1022 bf, a portal opened on the plains, and Humans started pouring through.