Hi, Edena:
A slight correction: it was in the 2nd IR (Industirial Revolution, a play by post game here at EN World) where the elves of Realmspace for the most part decided to attack Toril for the defeat and genocide of the elves committed in the 1st IR. The elves returned and chose to live among their former enemies, the humanoids, whom they had fought back-to-back against their foes.
However, in the 3rd IR set on Oerth, which I played in, the Elves formed alliances -- as did the other good and neutral races and nations. (The 3rd IR began with limited contact from Toril seeking to share the secrets of technology.) Turrosh Mak was convinced that the use of technology could not only make his nation powerful but cooperating with his neighbors would be better than fighting them. (Thus, Turrosh Mak can be seen as an example of successful diplomacy: appealing to his sense of self-interest and turning an enemy into an ally.) THe elves of Celene, the Ulek states, the Lendores and elsewhere on Oerth worked and fought next to their neighbors and can be considered to have successfully adapted. Indeed, if outside powers such as Mina (the main villain from the more recent Dragonlance books) had not intervened -- many of the evil powers would have fought among themselves to a greater degree. Indeed, they could have been overwhelmed by an alliance of humans, elves, dwarves, gnomes, halflings and more enlightened humanoids. (One could argue that they were as an outside power sought to help the peoples of Oerth and the other worlds survive. Elves cannot be seen as the losers in the 3rd IR at least.)
Each DM has to chose how each world works, and that includes the races. A key thing to remember is that intelligent people will often find ways to adapt to new situations. Rome overcame Ancient Greece, not because of Greek philosophy creating weakness, but because Rome had built up its power and created new military tactics. Meanwhile, Alexander's empire became fragmented and easier to conquer.
So, I think that DMs need to figure out how their world works. A key question to ask one's self is how different races think and interact. Also, it is very likely that human-like races will have a variety of cultures with different practices. So, one group of elves may fall to their neighbors and others adopt strategies to prevent that from happening. Some may decide to conquer the lands of their enemies and displace them, or to explore new lands.
Maybe someone can talk about Eberron and its elves. I am familiar with the setting, but I have not played in it. However, elves do have their own island continent, a nation on the main continent of Khorvaire, and are members of nations through out Knorvaire. Indeed, the term Khorvaire as I recall refers to half-elves as a people.