In the campaign I'm in....

[Eltern]

There are no halflings. Generations ago, the dwarves left their cities in the wake of several world events, and gradually came to be gnomes.

The gnomes of the world are wandering tribes of tradesmen. Not "merchants," but more like nomads.There are a few ruins of their ancestral cities left throughout the entire globe.

No halflings.
No dwarves.
Just gnomes.

I was stunned at first. But now I really like it

 

[Turanil]

These gnomes have the racial traits of 3e dwarves or gnomes?

 

[Eltern]

These gnomes have the racial traits of 3e dwarves or gnomes?

Gnomes.

 

[Crothian]

That's creative, as long as it makes sense in the game like it seems to here, that's great!!!

 

[Kae'Yoss]

IMC:

Dwarves: No humanoids, but outsiders from the Elemental Plane of Metal. Greedy raiders that several millenia ago attempted an invasion of the Material Cosmos and were repelled and hunted to near extinction as a result.

Halflings: The Fey Lords' second attempt to create a race that serves as go-betweens for the Lords and the fey living in the Material Cosmos. As the first race (elves), they didn't turn out as the Fey Lords desired, as their nomadic impulse (which was supposed to ensure their willingness to travel between the Material Cosmos and the Fey Realm) made them go away and never come back.

Gnomes: Created by the deities of invention and tricks to get them more worshippers (and thus more power).

 

[Dark Jezter]

In Soviet Russia...

Er, I mean "In my campaign..."

It's pretty much D&D by the rules.