Something else occured to me, if dwarves existed on Earth IRL, then they would probably be of the genus Homo. This would mean that there would be a distinct possibility of interbreeding between the two species. Given the low reproductive potential of dwarves; dwarves as a species might have gone the way of Neaderthal and been bred out of existence. In fact there were several subspecies of the genus Homo that coexisted with Homo Sapiens and were either bred out of existence or they could not compete with Homo Sapien.
Of course they could of been different enough genotypically to prevent interbreeding. Or they weren't of the genus Homo and instead their last common ancester was shared with gorrilas instead of chimps (just as an example).
I doubt dwarves are Homo, drunians are more like underground orangutans, as are troglodytes some far detached cousin of great apes the way blind cave bears are almost prehistoric and alien compared to grizzly bears on the surface for examples of inner-space xeno species (a broad term) dwarves are for artistic reference human looking, but that might be because generally upright (of some description) with a malleable neck is a effective bodyplan for creatures supporting a large brain without increasing total mass, quadruped's deal with this worse, wheras aquatic mammals have more space because a lot of development goes into the spine vertibrae & tail/fins so it is effectively one big neck with a usually large headcase.
Lets call them D(warf)omo-Sapiens for reference, detached genus of underground apes with either no eyesight (variably over time like other blind creatures) or highly refined darksight & other translocation. The underground is very demanding, so the creatures are very robust and physical, as are dwarves as of the moment.
(Surface migratory or native missing link of mammal) > Drunians > (missing link/Deep Dwarf splitoff before they got too large to pass through narrow spaces between layers) > Troglodytes > (Missing link) > Dwarves.
Rodents do exist underground and to that point are also super-sized by the surroundings so the best theory for the precursor of drunians would be a kind of small cave monkey like a tamarin of orange fur, given how biodiverse the caverns are a small opportunist vermin like creature would be able to eat the occasional cave sparrow egg, and not be devoured by flying hungry heads, bugbats, and gather stores of mushrooms to hide in cracks in the cavern wall.
The dwarves could go out at night when the sun's down. They probably wouldn't go near human towns if the lanterns were too bright.
Large scale mining is a difficult thing. Humans historically didn't mine that deep, focusing more on the top layers until the invention of TNT. Not sure how the dwarves would go about it, though. Patience and hard work, coupled with a long life?
Cross curiostity, if you were told of strange legends of a land unlike your own where minature men toiled over exotic metals and battled strange beasts you'd have your interest piqued not least by the greed of stealing what they make, in contrast humans appear to be threatening giants in a successfully spreading society as a cause for concern to dwarves. Exercising a larger dominon over the surface (a variable enviroment) than dwarves securing a few caverns at once and making very labour intensive underground roads to cross long distances, while humans spread out across wide open spaces.
Inevitably it causes conflict, the dwarf propensity to make artifacts & very fine good, ontop of a unforgiving authoritarian rule of law and humanity's apparent flaunting of it can brush human/dwarf relationships up very badly.