Gnomes are not from the Land of Faerie. When the material world contained only dragons and titans, and the Elder Gods walked the land, gnomes were, in fact, the original species of [Prime] Material beings.
They were made by the titans to act as servants and caretakers for the "garden." The dragons taught them all of their magics. The titans taught them all of their crafts. The gnomes were responsible for the proper growth and tending of all the plants and flowers, trees and vines, the newly made animals and goodly creatures of the land, sky and stream...as evil and corruption had not yet found its way back into the world.
When Evil came to the world and the garden was corrupted and (largely) destroyed, the gnomes were broken and divided, thrown into disarray and discordance. Many lost their way and fell into their own evil ways. Many others used their knowledge and magic to escape the blasted material world for -presumably- safer and more stable existences. The fewest remained in the material realm, hiding their communities as best they could, distrusting most other species as they, one by one, came to being, their nations rising and falling in the tumult of evil and chaos that is constantly ebbing and flowing across what -once- was the perfectly attuned existence of peace and harmony that was facilitated by them.
The Kaldoi went into the deep wooded hills, hiding away but keeping/deeply connected to their original purpose of "tending the garden of creation." Their willingness to trade and trust other species, believing and hoping for fostering the good of creation, have been led to their all-but-complete extinction. Only a few [known] enclaves scattered around the world remain or could be found by those consciously seeking out the Kaldoi.
The Pekki (commonly called "Pechs" by other peoples) found their way to the plane of Elemental Earth and became the elemental beings alchemists commonly refer to as "gnomes."
The Daktoloi went deep beneath the ground. Whether or not they still exist in the Underworld is a matter of some speculation, even for the more surface-dwelling Kaldoi.
The Telkini fled the upending chaos beneath the waves and are said to only heed the will of the gods and creators, destroying all who attempt to gain their aid to make wondrous weapons.
Many others did flee to the Land of Faerie -once it was created- at the start of the Godswar. Some are now called Spriggans, the Buckawns, others the goblinoid Redcaps, or bizzarely warpred Korreds. Still others, it is thought may have found their ways through secret paths to the Planes of Shadow, Ice or Fire. But these are mostly tales told by other gnomes for where the various original clans of gnomekind went (versus acknowledging their various destruction through all of these long ages).
All types of gnomes possess knowledge, history and lore, metallurgy and alchemy, and of course expertise for illusion and nature magics beyond almost any species. The fact most of the bigfolk see "gnomes" (the Kaldoi, as those are the only most people think or know of) as dangerous untrustworthy tricksters is a ruse they are happy to perpetuate to keep their communities hidden and their knowledge/secrets of the true natures, powers, and histories of the world, all their own.
Gnomes watched the coming of the first elves to the world. Oversaw (and some will say aided in) the creation of the first dwarves. Marveled at the elder gods' making of the Five Tribes of Men. The gnomes know and accept this unquestionably. It is a great "joke" -for them- upon the other species of the world. Gnomes were first (non-divinely made) people of Orea and knew/know arts, sciences, magics, and crafts the other species have hardly begun to imagine.
They exist on a cosmic platform all their own. Beneath their titan makers and dragon teachers, of course. But well above the "accidental" (if immortal) elves, the "carved rocks" called dwarves, and the -most laughable- "momentary flickering lanterns" known as humans.
They let the elves and men and dwarves tell their tales and write their histories...All telling different ways how and where the gnomes came from...All the while, it was the gnomes watching from the shadowed glades and deepest caverns, as these "new/young" species being born. It was gnomes who led the first elves to figure out how to harness the magics of nature. It was gnomes that taught the first dwarves (the "Rocks of Oor") how to mine and work with gold and iron. It was gnomes that brought Men to the discovery of their first letters and words to record their histories and ways and kings.
It was all the gnomes...but only the gnomes know that. How it makes them laugh. And they'll never tell.
Most lean in to being inventive creative types, always trying to outdo each other in their competitions. It doesn't really matter if it's illusion magic or mechanical invention, always pushing limits in search of improvements. This is both beneficial because sometimes things really do work, other times they just end up breaking things that worked just fine.
