Even so, ancestry looks like a useful term because it emphasizes multiple ancestors each transmitting a different lineage. Not only might the Elf have High and Drow parents, but perhaps has a draconic bloodline, meaning one of the ancestors is a Dragon, plus maybe one of the grand parents is a Human. The term ancestry invites this fluidity of possible origins for a D&D character.
My hesitancy over "Ancestry" is that Gygax when he used the word "race" meant definition 2a in the dictionary (as in the phrase "the human race"). The whole controversy is over the problem that 2a is increasingly an obsolete usage in the language (similar to how the usage "the race of my loins" is already pretty archaic) and so people seeing "race" confuse it with definition 1a which because of history is seen as insensitive or problematic.
The problem I have is that "Ancestry" is basically a synonym not for race definition 2a but for race definition 1a, so to me we are making a superficial label change that actually doubles down on the potentially problematic idea the label points to. There is to me a very strong danger that the idea now conveyed will not be race definition 2a, but race definition 1a.
I think having a second choice of "culture" helps defend against a little but not perfectly, as then "culture" might well end up pointing to race definition 1a. And all of this to me feels weird because hitherto, only race definition 2a ("the human race", "the elvish race", etc.) was even part of the game and change feels almost certain to make race definition 1a part of the game in some fashion.
It's all well and good to apply this to dwarves or elves, but as soon as you apply these changes to humans I think you have a problem.
Note, ancestry must also be distinct from culture. A character of Dwarf ancestry and a character of Human ancestry might grow up in the same town and be members of the same culture.
How the heck are we going to tease apart nature versus nurture for an imagined species? Are dwarves good craftsman because they are inculcated in a culture that prizes it, or are they good craftsman because they are naturally gifted at artistic work and skilled and dexterous with their firm and strong hands? Or both? This isn't a trivial question because we know that while talents can be honed by practice, there are some real-world individuals just more naturally adept than the average at painting or the like than we are, and have perhaps higher ceilings at particular skills or athletic feats than we observe in ourselves. I'll never run as fast as Usain Bolt or even Kaitlin Touhy, for example. The very act of separating these two things is going to be an act of judgment and opinion, and it's likely going to reduce the alienness and diversity of the fantasy panorama. To me the first instinct is likely to be the instinct to make everything conform to human norms and expectations about what is cultural and what is ancestral, the very opposite of what I want which is comfort with the notion of alien and different.
Meanwhile ancestry can refer to a species, or to a particular genetic trait within the species.
And there it is. Race definition 1a is now a part of my D&D. You are pushing my game to your racist place. This is likely in the long run to work out no better than the Hadozee which I'm sure were created by well meaning people as well.