If you presume a tendancy towards chaos and good coupled with very long life spans you might come out with something like what the Hippies were trying to ahieve in the sixties.
Indeed, this was my baseline...and I don't think it ruins verisimilitude any more than robo-golems, halfling-gypsies, and spikey armor.
Indeed, I'll go on a little derailment to justify it. Feel free to ignore, but it could be interesting!
(hijack)
So, if elves are all about the free love and 'careless' intercourse, where does that leave their society? If they're all about chaos, how do they maintain cities? A language? Simple relations conducive to growing up mammalian?
Well, for the elves, it seems, this is all about instinct. Elves aren't naturalists just because they hug trees and boink dyrads (although....). They're naturalists because an elf has never really had a need to 'evolve' a technological sensibility that other races (especially dwarves and humans) have depended on to increase the quality of life. This means that elves are closer to a natural, impulsive way of doing things...they haven't had a need to organize governments, because their natural tendancy is to work together, help each other out, and defend against outsiders. Some say that this is, in fact, the origin of elvish arrogance. When your outlook is Chaotic, holding any one race above others is nearly blasphemy...it's putting a rigid heirarchy on a natural event. However, elves just simply prefer the company of other elves. It's probably got something to do with scent. With the "smell of metal" (excepting mythril) being abbhorent to an elf, it's no big surprise that races that use a lot of metal (humans and dwarves, especially in big, clinking armor) see less acceptance by elves...and at the same time, this explains why half-elves sometimes result. Humans can rid themselves of the stench of metal, but it seems even the wildest dwarf has something steel and iron about his scent.
Thus, they seem arrogant and haughty because they really just are distasteful of the smell of others, and instinctively bond with each other above all else (an adaptation so that the gene pool remains in the same general vicinity). It'd be like if you met someone who always smelled like a sewer...in fact, everyone with green eyes always smelled like a sewer....even if they were smashing blokes in every other respect, they're still stinky...and people with your color eyes, well, they spell like exotic spice and berries...
So, now that we know elves operate largely on instinct, where does this leave elvish society? Well, it turns out that elves have never really needed much of a system of governance or control over each other, largely because even the few self-proclaimed Elven Kings (and there are more than a handful of them) only command respect with the rest of the elves agree with him. It's like, if the king wants them all to start baking cookies in a tree, and the rest of the elves don't see the point, they simply won't. And the king, respective of their individuality, won't force the issue. So they don't end up cooking in trees. However, if the king mandates that all practice archery...well, that just makes *sense*....the most orderly elvish societies are often those that have just agreed on the most cases, and they're often actually closely related, no more distant than second-cousins, perhaps.
So, an elf is born...what happens? Well, after the parents finish gushing upon it at length (and this ceremony of 'birth' can literally last months, while they compose poems about life and beauty, divine the little tyke's name, and generally ooh and aaah), it is raised initially by the mother, and one other elf. Rarely more than one child is produced at a time, since (a) elves are not very fertile creatures and (b) why try to produce another masterpiece so soon after the first? The mother, and usually the first other creature to see it's birth, feel an incredible urge to care for the young one. They see it as their own choice, but since it holds pretty universally, either all elves think suprisingly similarly, or there's something a bit biochemical about it.
After the kid has been nursed (done on dew -- female elves don't lactate (they don't have enough body weight or extra energy storage ability for it), though neither do males...) to toddlerhood, his schooling and education fall squarely on his own shoulders, as his mom and "father figure" dance their own seperate directions. Due to the lack of nursing, baby elves don't develop the same mother-reliance and sense of matronly debt as most other mammals...their respect for parents is based entirely upon egalitarian determination of the parent's abilities...if their mom is a deadbeat, they're more than happy to call 'em on it, and try to associate with elves of better repute from an early age. The kid may be somewhat on his own, but he's kept within the elven community as much as possible. They often get their first military training here, as this is also the first part of their lives that they encounter true danger. While all elves feel a special protective desire for the scamps, they equally as strongly have the feeling of elvish noninterference, which leaves the kid to deal with his own problems until the last minute.
After the first few decades of life in the "trundle years," an elvish youth starts to gradually settle down, as puberty approaches. Coming of age is a long and involved process for an elf, as many elves see the youth as finally realizing their full potential to appreciate beauty. Beginning at about 50, and often lasting through their 80's, elves slowly become full elf-women and elf-men. They often start begining their trade at this point, becoming rangers, druids, bards, and, of course, wizards and sorcerers. The elvish wizard is largely a replacement for the technology and farming of the other humanoid societies...since many elves lead risky childhoods, more than a few have a level or two in Wizard by the time they reach adulthood, and they put it to good use productively, making food and light, seeking knowledge, and exploring the world in front of them. By the time they are 100, they are often fully adult, though they're still considered younglings for another two to three decades after.
Here is where they start expriencing the elvish inclination to associate with other elves, to bond with them, and share a community. Some, of course, don't develop this, and many of them go on to become adventurers in the world, delaying their 'maturity' for quick fame and money outside.
Of course, all adult elves, no matter their location, feel the monthly draw of physical love. An elf's mental state often is akin to the moon, with them being dark and brooding during the new moon, a range of emotions in between, and finally exhuberant and peppy on the full moon, often resulting in throes of passion, and an excess of alcohol (especially to get rid of that 'stink of metal.') Elves are often promiscuous normally, sleeping with men and women of non-'stinky' type and appropriate size that mesh with them (e.g.: mostly only humans and other elves), and their senses of cleanliness and refinement are surpressed during this period, leading to more risky dalliances. Still, they respect choice most of all, and so several elves are happy to sit alone with little more than some privacy on this night, if no apt choices present themselves. Within a community, this monthly occasion is often celebrated with a spontaneous 'free day,' and elf men and women who live in close vicinity to each other tend to take on each other's timing cycles. This monthly cycle is produced by something akin to the menstral cycle in human women, though this extends to elf males as well (their production of their own reproductive part is quite a slow process, though they tend to have more potent seed, on average, than a human).
And what of providing for the community? Well, elves are gatherers by nature, and largely vegetarian (though the occasional feast may see some meat). They tend to live in trees that produce a lot of nuts or fruits, and gather many berries from the surrounding bushes. They are careful to plant the seeds again, often under the care of a local druid (and generally the bigger the forest, the more powerful the druid). Truly, this gathering seems to be the source of the elvish evolution of asthetic beauty...when flowers and scents and the bends of branches are your promise of food, it really pays to be able to see vibrant colors and small details. Elves who aren't leading stressful lives (read: who aren't adventurers) also tend to be able to live on less food than a normal human, reducing the stress on the local environment. However, odly, the less food an elf has access to, the more hungry they will tend to be. Much of this is likely pyschological -- it's easy to panic an elf.
Elves tend to work best in small enclaves. Not only does that mean that each individual can stand out in the crowd, but it also means that certain things that go along with high population densities (such as disease) are less prevalent in elven communities. Whether this lead to their low constitution, or whether their low constitution came first, is a chicken-and-egg sort of argument. Either way, less density = less disease = less Fortitude saves = less worry about suddenly succumbing to Filth Fever (though many adventuring elves get pretty ill their first few days out of the treetops). Their Dexterity enhancement seems to be a side-product of this, spacing lighter and frailer bodies with equally as strong muscles, enabling them to dodge an attack that other races would resist. Elves are the type of people you'd kill by slappin' on the back, but trying to slap them on the back can be a challenge in and of itself.
And as for the elderly in the community...well, an elf certainly respects knowledge (as their inclination to Wizardry woudl establish), and many elves who grow old also grow more distant and unapproachable. Donations of food and wine are braught in exchange for knowldge from the treetop domains of the village elders. This barter-schooling system works best with the young tykes and moppets of the elven village, ensuring that in their last days, the elven elderly are surrounded by the young bloods their great-grandchildren are rearing.
Economy? Well, when elves are concerned at all with money (which is only in the value of art it can buy them), they tend to export magical knowledge and rare forest herbs (supplied by their fey and druidic connections) in exchange for protection, a sacred zone of forest, and free travel through the domains they trade with. This is decided on a typically individual basis...if loggers come through, an elf may offer them a book of magic in exchange for preserving a certain section of forest. If an elf is stopped in travel, they'll often pop up with a medicinal herb from their homeland in exchange for passage. An elf is rarely without a good or service to trade.
(/hijack)
I think it's a pretty good functionalist analyzation, anyway...