Hic Sunt Dracones
Elves: the Dream Folk
Elves don't belong to our World. A long time ago, for reasons best kept unspoken, some Elves were cast away from their own world (which scholars call "the Feyworld" or "The Dream" or "Arcadia"). They settled in the primeval forests of Terra Antiqua, developing a deep connection with trees and wild animals. But nevertheless they miss their homeland beyond Reality forever.
Being Fey, they are ageless and immune to every disease, immortal until they decide to fall into an eternal sleep or someone kills them. But, as they are alien to our world, they are allergic to some substances, like Iron, or some plants, like the Golden Star of Lhammas (a flower that blooms in summer).
A couple of centuries ago, just before the Discovery of the New World, Elves vanished. They left their cities and castles and holy groves abandoned. Some time later it was understood that they simply exiled themselves in the sky, building new amazing cities over the clouds and traveling on their flying ships. Floating markets and flying circuses became since then a great attraction in every big cities where Elves are allowed to trade.
Elves do enjoy dancing, singing, drinking and having fun. They hate any kind of labors. So they prefer to steal (note: Elves would never say "stealing" but "borrowing"). They steal food, cloths and tools. They steal stories and mannerisms, music and dance. Eventually, as they are not a really fertile folk, they steal even babies: these babies, having grown up in the elven magic, become the "Changelings" or the "Half Elves".
Apart stealing, Elves like learning, collecting and trading. (Dwarves would add "talking", or better "twittering" as to their ears Elvish sounds like a non sense endless chippering of birds).
According to the Church Elves have no immortal soul. Commoners are anyway always excited when they have something to do with Elves, as magic and wonder are always about to happen next to them (but before they will lock their gold and children in the cellar).