As they appear in the Chain Mail Fantasy Supplement, the various humanoids and demi-human races have only a single troop classification each. For example, there are no elvish light foot or elvish heavy foot, there are just elves, all of which are classified as heavy foot with 12” movement and bows. Somewhat amusingly, then, it could be argued that Chain Mail was the first place where the concept of “race as class” manifested in the Dungeons & Dragons corpus. Indeed, this conceit seems to have persisted into the Monster Manual, where for instance elves are listed as doing 1-10 damage, and beyond. However, it is worth noting that in Spells & Swords lightly and heavily armoured elves are provided as an analogue to lightly and heavily armoured men, even if the same cannot be said for halflings, gnomes, dwarves or humanoids. Nonetheless, the four basic demi-human races of Advanced Dungeons & Dragons originated in the Chain Mail Fantasy Supplement, and it is noticeable that gnomes are not presented as a playable race in the original edition of Dungeons & Dragons, though they are described in Monsters & Treasure. By the same token, fairies are listed in Swords & Spells, but not in Dungeons & Dragons.
One possible reason for the exclusion of fairies and gnomes from Dungeons & Dragons as playable races is that they are in the same troop class as elves and dwarves, respectively. When gnomes are described in Monsters & Treasure it is noted that they are “slightly smaller than dwarves, and with longer beards”, that they live in “hills and burrows” as opposed to the “mountainous homes” of the dwarves, that they are more reclusive than their “cousins”, but in all other respects resemble them. Similarly, when fairies resurface in the Advanced Dungeons & Dragons Monster Manual it is as an alternative name for “grey elves, albeit now spelt as “faerie”. It can be seen, then, that these shared troop classifications in Chain Mail were the kernel for the concept of the demi-human races being organised into subraces, a fate that gnomes more or less escaped when dwarves were divided into hill and mountain types. Also first introduced as a playable races in the Advanced Dungeons & Dragons Player’s Handbook are the semi-humans, which is to say half-elves and half-orcs. These two options are fairly clearly imported from Middle Earth and the Lord of the Rings, though altered during the transition in various ways; as combination races they are an analogue to the multi-classes.
Just as with the prohibition on demi-human player character clerics, the subraces made their way out of the pages of the Monster Manual and into Unearthed Arcana as playable options. Perhaps the most famous of these subraces is the drow or dark elves, not only as exotic and despicable antagonists, but also as the progenitors of perhaps the most popular and simultaneously unpopular Dungeons & Dragons character of all time. In this way halflings were subdivided into hairfoot, stout, and tallfellow, gnomes into deep and surface, dwarves into hill, mountain and grey, whilst perhaps most egregious of all elves were subdivided into dark, grey, high, valley, wild and wood subraces. Frankly, this proliferation of playable options needlessly bloated the game, the net result being the encouragement of character optimisation; as Gygax attested, players who wanted to play an elf magician, including himself, selected the grey elf subrace because it was the best prospect for the advancement of magical ability. Rather unsurprisingly, second edition initially reversed this trend and then gradually reintroduced all of the previous options and more, giving us sundered and deep dwarves, rock and forest gnomes, not to forget orcs and other monsters as playable races.
Most of what Advanced Dungeons & Dragons calls subraces rely on their environment for differentiation, which is to say that there is barely any justification for them. The distinctions drawn are rarely any more sophisticated than denotation as mountainmen, hillmen, woodsmen, plainsmen, rivermen, and so on; fantasy adventure games being what they are, the prefixes “dark” and “deep” can also be profitably employed to describe evil aligned or subterranean dwelling variants on a demi-human race, in other words of the underworld. Indeed, this simple taxonomy of races and subraces can potentially be quite attractive, and certainly the World of Silver Blade initially embraced such concepts readily. When one considers dark gods, elves, dwarves, priests, wizards, and knights, it is a rather short step to “dark” men, halflings and, gnomes, not to forget the ever popular “anti-paladin”. At around this point it all becomes faintly ridiculous, or at least it ought well to seem so to anybody with a decent sense of aesthetics (yes, that is a somewhat subjective sentiment). None of this is to say there is no place for “mountain dwarves” and “wood elves” or “dark gods” in adventure games; it is just a rejection of proliferation for its own sake.
The basic underlying question rarely asked of playable races and subraces is what the point actually is of having them and where the appeal lies. Gygax was quite frank when questioned about his motive for their inclusion, which was that the Lord of the Rings was enjoying an unprecedented popularity at the time as the touchstone for fantasy and he hoped to harness that for commercial purposes. Bearing in mind the ever controversial demi-human level advancement limitations and discouragement in the Dungeon Master's Guide as to monsters as player characters, this does ring true; Gygaxian Dungeons & Dragons is human-centric. However, it does not really answer the question, which is why is it that people desire to play non-human characters in the first place? A passable case could be made for it being chiefly about escapism, shedding even humanity in a bid to get as far away from the mundanity of life as possible, and for some people this may well be true. Really, though, that is a fantasy underlying a fantasy, inherent humanity is a basic limitation on the ability of the mind to explore any imagined landscape. It is this that leads to the assertion that playing a demi-human is typically nothing more than playing a human in a “funny suit”.
Such sardonic condemnation somewhat misses the point of playing a demi-human, though, and that is role emulation. It is no coincidence that so many new players name their first halfling Bilbo, their first dwarf Gimli, or have a Tanis Half-Elven. Perhaps the most alluring prospect of adventure games is the ability to step into the skin of a beloved literary character and assume their role, or one close to it. That is the actual purpose of playable demi-human races, not to escape human experience, but to facilitate the exploration of a particular character or archetype, often including its own subversion. A subrace usually isolates particular characteristics and repackages them as something new, dwarves that definitely live in mountains for instance, narrowing the role for the player in advance. Essentially it comes back to the question of abstraction versus specificity, with subraces as a means of increasing the degree of the latter at the expense of the former. More detail determined in advance of contact with the imagination of the player, more structure and uniformity with less room for deviation and innovation. Not that such is inherently bad; it is just that treating a subrace as an optimised version of a race rather defeats the point.