Characters in Ilvia can be Humans, Dwarves, or Elves. There are no Halflings or Gnomes in Ilvia.
Humans are the dominant race in northwestern Ilvia. Since the fall of the Ilvian Kingdom almost five hundred years ago, they have lived primarily in the coastal regions that remained habitable after the War of the Wizard (mostly in the vicinity of Darian, the old capital, which is now situated on the southern side of the mouth of the Bay).
During the last century, Humans began a halting and tentative effort to explore and resettle the inland regions of Ilvia, which have finally begun to recover from the devastation of the War. Small human settlements have begun to spread along the southern coast of the Bay, and a few along the northern coast. None are farther east than Cullan.
Most Dwarves in northern Ilvia are not natives, coming instead from the sovereign Dwarven kingdom in the southern part of the Ilvian continent. However, Dwarves are a familiar sight throughout the Human settlements of the northwest.
Before the War, the Dwarven kingdom enjoyed friendly relations and lucrative trade with the Ilvian Kingdom. The Dwarves were largely spared the effects of Heyraud's wrath, and since then Dwarves have become more common in the north. Some came because they regarded the Humans as friends and wanted to help them rebuild; others came because there were ample opportunities for work.
Dwarves helped build Cullan and its Abbey, and while few Dwarves live there now, there are always some in town conducting business.
Ilvian Elves are an oddly displaced people, generally well liked by Humans but perpetually regarded as outsiders.
During the days of the Ilvian Kingdom, five hundred years ago, there were no Elves at all living on the Ilvian continent. But shortly after the War ended, with Ilvia devastated by Heyraud's blast, one hundred Elves appeared on Ilvian shores. They had come from Galria, Ilvia's former enemy, and they spread out across the northwest, helping the surviving Humans rebuild what they could. In particular, they taught Humans of the power of the goddess Arva, a faith that the Humans turned into the Ilvian Church. (Although most Elves are followers of Arva, they typically do not join the Church, preferring a more individual approach.)
All Elves in Ilvia today are descended from the One Hundred. They regard Ilvia as home, having never known any other; and yet they know that their roots lie in Galria, a closed land most of them have never seen. They know that their ancestors came to Ilvia to help rebuild it after the war, but they don't know why.
By the same token, although Elves are generally respected and accepted by Humans, there is also a hint of suspicion that the Elves harbor secrets they choose not to share.