Gnomes.
Halflings are nothing like gnomes, they are completely distinct and have a unique feel and culture. You can't just call them gnomes. Beardless Gnomes or maybe Chubby Gnomes, sure. But just gnomes? Please.
Gnomes.
In our world they're called the Hin, and "halfling" is a derogatory term only.
Agreed. I think "Hin" was in use in the Forgotten Realms, so I don't know if it's a "neutral" term.
Back in 3.5 I played a hin sorceress who would get into bar fights whenever she heard someone refer to her as halfling. She'd lose every time - she's was small, STR 8 sorceress - but she'd still do it for pride. (Yes, she could toast everyone inside the bar with her magic. That's not what she saw barfights as about.)
Actually, she ended up impressing some local dwarves for her willingness to drink hard liquor and wade in with her (diminutive) fists.
/agree with everyone saying "Halfling is the generic term"
LORE: In their native tongue, these small people call themselves "Hha Flingsu" which literally translates as "The People". Halfling is a corruption into the common tongue and has nothing to do with their relative size compared to other races.
Hill Goblins.
"Hin" is from Mystara, actually, but the fact that few people know that makes it work just as well in my opinion.
It's from both Forgotten Realms & Mystara. Considering that Ed Greenwood (aka Mr. Forgotten Realms, himself) wrote The Five Shires gazetteer for Mystara, it should be of little surprise that he used the term in both his works.