So here is a question.. in fantasy games, the term "race" usually means something closer to "humanoid species" as in Elves, Dwarves, Humans, etc. Now what if you want each of these to have actual races as we think of them in real life? What do you call the "races"? Species is the default and correct term, and would be fine in a sci-fi setting but some how talking about species and elves in the same sentence is odd. Anyone got a better term to distinguish between Elves and Dwarves when both have sub-species, aka races?

I just always thought the sub-races for Dwarves and Elves were stuff like "Hill Dwarf", "Mountain Dwarf", "Forest Elf", "Lake Elf", "Night Elf", etc...?

Phenotypes. Have you checked Race (classification of humans)?

Tribes or clans or possibly kingdoms seems to be what fantasy games actually call these things.

I feel like 'tribe' and 'clan' both indicate social groups, not genetic ones.

How about "Bloodline", "Lineage" or "Family" ?

"Race" as the term was originally used fits with the Dwarf/Elf distinction, although today it is used almost exclusively to describe fairly vague distinctions between skin colors.

You could just make up a word, but anything like clan or tribe will probably do (they are social groups, but typically defined by lineage anyways). Bloodline also can fit, and phenotype is certainly applicable, if a bit scientific for fantasy.

If you really want accuracy in naming, it would be worth exploring why there are these different branches of elves and dwarves. Is it just phenotypic plasticity (the same genotype but exposed to different circumstances, like a person with varying levels of a tan)? Normal variation of genotype in a large, heterogenous population? Divisions according to profession? Geographically dispersed communities, allopatrically speciated?

Well, elves would have different races the same reasons humans do. Genetic drift and environmental factors create superficial differences along with a spare few physiological ones.

I tend to think that "Race" as a term to distinguish between "Elf" and "Dwarf" tribe or clan for distinguishing between "Cave Dwarf" and "Hill Dwarf" is acceptable, the terms are more social in nature than genetic. Bloodline would work though as it references the genetic nature in an easy to understand way without sounding too scientific.

Maybe sticking with race for the big groups and blood lines for the sub-groups.