I notice several suggestions above that in 'Western D&D' the 'other' be 'Native American' elves, rather than 'Redskin' orcs. Be warned that this postmodernist 'Dances with Wolves' approach to the genre will actually take your game further away from the traditional Western than standard Gygaxian D&D. If the natives are the good guys, doesn't that mean the settlers (humans, presumably) are the bad guys?
You can try to resolve this by having 'good native' elves vs 'bad native' orcs, but the natural logic of the colonisation setting would be for the orcs and elves to unite against the colonising humans! So then either you run a game where PC elves and (half) orcs battle the genocidal human invaders, or the PCs are the Evil side, committing genocide against the innocent elves.
You can try to resolve this by having 'good native' elves vs 'bad native' orcs, but the natural logic of the colonisation setting would be for the orcs and elves to unite against the colonising humans! So then either you run a game where PC elves and (half) orcs battle the genocidal human invaders, or the PCs are the Evil side, committing genocide against the innocent elves.