Something I did for one campaign was that I had dwarves literally be born of stone. They were effectively asexual, reproducing by shaping new (adult) dwarves from stone in magical forges. When they died, they would actually return to stone. They had mausoleums that could be mistaken for underground statue gardens, and one of the greatest punishments for a dwarf was to be denied a place among their ancestors in death).
Over time, some of the forges were lost or destroyed in wars and other disasters. Those clans were forced to either join other clans, if they would have them, or resort to biological measures to avoid dying out.
The mountain dwarves are the OG dwarves born from stone. Whereas hill dwarves are the biological children of such dwarves, who remain flesh and blood upon death. As such, hill dwarves are looked down upon by mountain dwarves, but most people find hill dwarves more personable.