For D&D, the term species works fine, as long as it is distinct from culture.
Note, the playtest Elf is a single species, where Drow, High, and Wood differ mechanically via certain innate spells.
There is no problem having diverse elven parentage.
Even so, ancestry looks like a useful term because it emphasizes multiple ancestors each transmitting a different lineage. Not only might the Elf have High and Drow parents, but perhaps has a draconic bloodline, meaning one of the ancestors is a Dragon, plus maybe one of the grand parents is a Human. The term ancestry invites this fluidity of possible origins for a D&D character.
Note, ancestry must also be distinct from culture. A character of Dwarf ancestry and a character of Human ancestry might grow up in the same town and be members of the same culture.
Meanwhile ancestry can refer to a species, or to a particular genetic trait within the species.
My only problem with ancestry is that it feels like its real life usage is about country of origin (and thus conflated with culture). Is it common for an English speaker in the US to say something like "I have <insert other country> ancestry"? If that isnt' common, then I have no objection.