I reckon Dwarves were always around, along with Elves. The fact that Dwarves build and delve and forge whilst elves do nothing seems to point to this. I see Elves as immortal wasters, never doing anything because they could always do it tomorrow, and Dwarves resenting the fact that the lazy Elves got to play with eternity whilst the industrious Dwarves toiled away, conscious of the fact that their life has an end.
I'd agree with the fact that Goblins are or were Elves, warped by demonic forces. The love of nature and laziness became a restless hatred for all things, hence why goblins intentionally throw up sterile obsidian towers. Their restlessness also drove them to forge iron to cut trees and slay elves. Again, they have an implacable loathing for the steadfast, mortal dwarves who stand in their way, wielding steel and Adamantine, the very substance their overlords fear.
Humans represent another try by whatever forces created the world. They are mortal and prone to disease, much more than the solid Dwarves, but they hold few grudges, and whilst they do work hard, it rarely, if ever, completely consumes them. Obviously most humans loath Goblins, although there are tribes that may work with the hateful greenskins.
Kobolds are somewhat of a mystery. They live and die quickly, living of pilfered produce, and few will bother with them at all. They speak an incomprehensible language that varies almost day to day, and seem to fear everything.
This is how I see the DF world, anyway. I'm sure it has a few issues, because I've never written it down before.