If the lesser Dryad race was called a lesser Dryad because they could not transform into a humanoid form, then, this race was called a lesser dwarf because they were indeed dwarves, but they were much smaller than dwarves!
These lesser dwarves or what could be called 'Lilliputs', were only the size of a fist, so small that they could be easily trampled to death.
That's why they created their own paradise far away from aggressive animals, humans, and other humanoid non-human races.
The Lilliputs lived in Tiny Utopias, and because they were only the size of a chibi figurine, they had to live cautiously.
Of course, the Lilliputs could live up to now because they created many technologies suitable for their small bodies so that even when they were caught in danger, they would not be trampled to death so easily.
