Dwarves are usually short, stocky type people. They're built stoutly and are usually stronger then humans and elves and such. Hobbits are a shorter kind of people who aren't as stocky as drawfs. They also tend to not live underground like dwarves do.
Actually, Hobbits always did live underground, until recent times, blah blah blah... Now the only ones who do are the very poor and the very rich. But their decor and such is still very reminiscent of the holes from their heritage.
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