Comic strip
http://oglaf.com/princemas/
I must warn others that you shouldn't go anywhere from the current comic strip unless prepared, it's apparently very NSFW.
I would say the city of Armengar from Raymond E. Feist's "A Darkness at Sethanon", the last part of the Riftwar Saga, is pretty dwarfy, despite being built by elves and taken over by humans.
Firstly, there is a huge outer stone wall protecting the main city. The main city is a bunch of 1 story buildings with flat roofs, for archery platforms, and small, twisting streets, for slowing down invaders. Each house can barricade its door and has access to its roof, and there are bridges across the rooftops which can be retracted so if invaders takes one house, the defenders just move to the next one and pull up the bridge.
Here's the where it starts getting really dwarfy though: the city is built leading up to a huge fortress carved out of the side of a mountain. The fortress and city sit atop a large network of naphtha mines (which they kept stockpiles of around the city and fortress), accessible through the fortress, which must be constantly vented in order to keep the fumes from building up. (or was it the other way around, and it must not be vented in order to keep the oxygen/fume ratio low to stop fires, I forget)
Should the walls and city fail to protect the fortress, and should the fortress be almost certain to fall, the vents can be closed up to allow the fumes to build up. The surviving population can sneak out a hidden back door, and all it takes is one spark to send the whole city and mountain up like the 4th of July.