Well, IIRC, gnomes fit a distinct mechanical niche in 1st/2nd ed: they were the only ones out of the 3 short PC races able to cast arcane magic (& I'm not sure if any of them could cast divine magic until 1E's UA or 2nd ed. ....). If you will:
- Dwarves were the tough warrior-folk miners, as per Tolkien.
- Haflings were both the comfort-minded Hobbits & the nimble small folk.
- Gnomes, OTOH, were the equivalent of the dwarves & other little folk of myth and legend. Many of the dwarves in myth seem more akin to D&D gnomes that dwarves, whether it's Regin or Rumplestiltskin.
With the abolishment of the race/class restrictions, gnomes lost this distinction. I think there's been a bit of a scramble on how to define them (since you can now have a dwarven wizard if you want a "dwarf wizard" concept, rather than using a gnome).
Personally, I had a rough time with gnomes IMC--had a hard time defining them. But then, I made them a half-race, ala half-elves and half-orcs (specifically, the child of a dwarf/halfling pairing). They have shorter lifespans (more like a svirneblin's, which is just about midway between a halfling's & a dwarf's), & they have the Dwarven Blood racial trait, but otherwise, they're as statted in the PHB. IMC, they're the only descendants of a now-lost culture of halflings & feytouched dwarves (hence the magical abilities). Besides, I wanted to have a half-race from 1 of the shorter races (didn't care for the half-dwarf Mul concept).
My group has had 1 player play a gnome--he started off playing a gnome due to limited selection (since some gnomes lived in the area). However, ever since then, he's been a gnome-playin' fool (and these gnomes tended to be brash lil' lunatics, too).
