Gnomes exist in small, peaceful villages in close proximity to human habitation. They are a merry race of creatures, fond of music, dancing, drinking and seem to have back to back celebrations and events. They rarely travel far from their villages and are, at least initially, startled by outsiders but once a given visitor has shown that they mean no harm, are warmly welcomed to join their almost endless celebrations. However care should be taken as several of the drinks they enjoy are spiced with strong hallucinogenic herbs and mushrooms that have only minor effects on a gnome, but will cause any other race to completely lose their grip on reality for several hours – something that most gnomes find utterly hilarious and highly entertaining.
Gnomes rarely fight (at worst, they occasionally fight each other with bare fists after drinking too much, but even this is rare), and when threatened will literally merge into the ground, as they can pass through soil and stone at will. The only exception to this is Goblins, whom they despise, and have developed a enchanted tiny tin-whistles that only they can play, whistles that cannot be heard by anyone other than Goblins, and cause them intense physical pain and drive them away.
Gnomes are exceptional herbalists and most gnome villages have at least one or maybe two Alchemists of unparalleled skill. The only limitation is that the potions, talismans and magical trinkets they make can only have healing or protective qualities. There is one exception however, Gnomes are fond of magical Seax style knives, which they use for day to day activities, and in a pinch, to defend themselves. But Gnome fighters are exceptionally rare, and in almost every case – they will simply sink and disappear into the ground when confronted (though any items on them are lost when they do so).