Without contrast, gritty is meaningless.
This is one of the biggest traps people fall into. They forget that contrast is essential for defining anything.
You have to have things that aren't "gritty" to make the "grittiness" seem more apparent and more meaningful.
Well, the contrast would be with any other D&D world.
If you want it more grounded, then the lines between "good peoples" and "bad peoples" would need to be blurred. Once you have an "always good, always right, never capable of mistakes" people existing within your world, any grounding of the world just goes away.
For instance-- back when White Wolf was doing World of Darkness in the 1990s and you had those vampire clans...
If one single clan had it all completely figured out and could totally co-exist with humans without causing any harm at all and had all of the best stuff and was immune to all of the vices and pitfalls and weaknesses of all the other clans...
Well, it would seem kind of silly to be any other clan.
And, unfortunately, elves kind of inevitably end up being this. Because it is kind of difficult to say that individuals can live on for hundreds of years universally and any single individual among them who is not good is a total aberration, a super rare deviation from the model... well, unless they have everything totally figured out.
If they were prone to all the pitfalls and vices and dangers that a human would, then they would generally have a human lifespan and they would most definitely be abusing their edge on others in selfish and cruel ways that would definitely not have them labeled universally good.
And the whole other Elf problem, shared with Gnomes, is that if magic is just generally not seen within the world, and there is no high technology that breaks the general laws of physics as one would get in Steampunk, then there really isn't a place for races whose central identity is totally contingent upon them having natural magical powers (or exclusive access to high tech).
If you remove these elements-- if your elves are no longer immortal, no longer have natural magical powers that allow them to not have to bother with manual labor to exist as a society, if they are no longer naturally more beautiful and ethically superior to all humans... what exactly are you left with? Just pointy-eared humans with 0 actual identity. Maybe if you toss out the High Elf and lean heavily on the Wood Elf, you could at least have them be pointy-eared tribal humans who live in the forest, I guess.
But you would be far better off getting rid of those and instead having the races of the world, if there are going to be any, to be things that don't generally live longer than humans, are not expected to be ethically superior (in fact, better if they are expected to be crasser and crueler), who have clearly defined strengths and weaknesses when compared to humans and don't need magic to explain their existence.
Or, to put it another way, Deep Space 9 is the gritty Star Trek show. And you don't have the ultra long-lived, ethically superior Vulcans who can easily exist without a brain, transfer their mind into someone else's to allow themselves to be resurrected and have superior intellect, strength and technology compared to humans....
Instead, in the main cast you had Ferangi, Klingons, Cardassians, and Bejorans.... all but the last generally being considered "bad guys" because of their general questionable ethical principles and none ever really being presented as vastly superior to humanity in any respect-- rather, any advantage they might have tended to be offset by a glaring weakness. In fact, I think the couple times they had a Vulcan on the show at all, they tended to be far less perfect than the race had been depicted since the 1960s show.