It is a misconception that the dwarf is of the kingdom Animalia.
They in fact belong in the kingdom Plantae.
This misconception arises from the dwarf's appearance. The fleshy, pink thing that yells and dies a lot is not, in fact, the dwarf. This is mearly the nutrient sack that feeds the true dwarf.
The strange, hair like growth growing on the fleshy yelling dying part, most commonly mistaken for a beard, is in fact the real body of the dwarf.
The dwarf is a plant, leeching nutrients from its mobile nutrient sack. Its favourite nutrients are produced through the consumptive process that the fleshy pink yelling bleeding dying part frequently engages in, as these help to stimulate its growth. Water does not provide the raw materials that the nutrients sacks need to produce the dwarf's favourite nutrients, and as a result causes the dwarf to become sluggish in an effort to conserve resources.
Dwarf's frequently get odd nutritional urges which appear to the uneducated to be strange moods and demands of other dwarfs. If these urges are not met, they can often cause the dwarf to begin cannibalizing crucial parts of the nutrient sack, as it goes into overdrive seeking the nutrients it desires.
This frequently causes problems within the distillation and ambulatory segments of the fleshy pink bleeding yelling dying burning oh god make it stop part, which most onlookers mistake for common insanity.
This also explains why what is commonly mistaken for a dwarf has such a terrible survival instinct. In reality, the dwarf facebeard plant thing simply has a very short term outlook, and while it is aware that should the fleshy pink bleeding swearing yelling dying pooping burning oh god make it stop part die, it will live on to consume the remaining nutrients, growing for many months if not years, it has difficulty grasping the concept that after all its nutrients are consumed, it too will die.