Creating Fantasy Races
Elves, dwarfs, orks and even faeries are all perfectly acceptable choices for a fantasy story, but they create an immediate impression. That impression is a world that is similar to either Lord of the Rings or Dungeons and Dragons. I happen to enjoy both of those as do a lot of other people, but most of the time I would rather avoid my story feeling like it was trying to be one of those. Because of that I tend to make up my own fantasy races using a top down method. The good news is that it isn't all that hard.
Before I even begin to think about the race I am creating I decide what they will be doing in the story I want to tell. Will they be antagonists, rivals, friends, slaves or something else. Do I expect to see a lot of members of this race or just the one that interacts with the main characters. At this point it is also worth considering how they will effect the perception of your story. The more fantasy creatures, and the farther they are from human the more strange it will make your story feel.
This leads to the second step of the top down process. Picking the races style. At this point you're still not going into much detail. Instead you are choosing between humanoid, animal like or Lovecraftian. Humanoid races are any race that looks and acts generally human. Elves, Orks and Dwarfs are all classic humanoid races. It could also include a race of men with bird wings, humanoid cats and almost anything else that has stands upright and can speak English.
With animals I include the Chimaera. These car range from intelligent animals, like those often found in fairy tails to anything that is sufficiently different from a human that special accommodations would need to be made in the world. Keep in mind that the animals they are like need not be real animals. The primary point here is something that isn't humanoid, but is still understandable to humans.
Which leads to the third group. A Lovecraftian race is one that either in appearance, thought or both is so different from humans that they can't be understood by people and don't interact directly with them. This includes, the writer, the reader and the people in their world. If they can fit easily into a category in your mind they're not truly Lovecraftian. Writing for these is an article in and of itself, but when writing anything Lovecraftian the key is to leave out most of the details. For the sake of this though keep in mind that if Lovecraftian monsters are common, or known in your world it's going to be very different from our world.
With this decided it's time to begin to consider your races nature. This is of course going to be partially decided by the type of race, but not entirely. Even Lovecraftian races have different personalities humans just are able to make any sense of those. This should cover their physical abilities and structure as well as their personality tenancies. But keep in mind while doing this that these are the common tenancies of your race not the only thing they are. Just because your race tends to be xenophobic doesn't mean that every member of their race can't like other people. Having the natural tenancies of a race clash with the learned characters of the race adds complexities to individual members of the race. That clash leads to the fourth point.
Once you know where your race started it's important to tell your races history and learned personalities. This includes things like the religion, enemies and major points of the race. Did they once rule the world and lose control or have they fought their way up from nothing? Again, this is a great place to add conflict inside your race just as you might add conflict in a character. For example you might have a race that is naturally inclined to be great warriors, but has been enslaved. Some of the race may fight for those who are enslaving them in wars, or as gladiators while others see that as a failure. Or perhaps you have the opposite, a naturally peaceful race forced to become experts at war because of their enemies and now some struggle to return to what they once were. This is also where I consider how they interact with other races in the world. Do they intermingle easily, are they part of a bigger society or have their own lands.
The final step is creating a single member of your race. The character who is going to be in your story. What is important to remember here is that, unless you spend a lot of time setting up who the race is most of what the reader knows about the race will be dependent on this one character. So if you make a race of fearless warriors, but the only one they see is a coward they're going to assume they're all cowards. So, in most cases what you're going to have the iconic member of your race be the one you see the most. Either he is everything that race sees themselves as or he is an outcast because he is what the race should be. Of course just like all characters you need internal conflict if you want to make them interesting, but in this case the internal and external struggles are likely to be the same as those of their race as the character is pulling double duty as both an individual and the example of what their race is to the reader.
This method is not perfect, and it is most useful if you already have at least some idea what your story will be. But if you actually create a race with internal and external conflicts, which fits well into your world it can also create interesting ideas for stories that you might never have thought of before.
Image from Welcomecollection.org