Below is an alternate history, including a twist that GM’s may want to keep secret from their players and let them discover it hint by hint. Maybe following a researcher that left notes similar to the Wanderer.
About two millennia ago the cleansing wars came to an end. The last Dwarven stronghold, Kemalok, fell. Right after, Rajaat was imprisoned. What a coincidence to happen in the same year after 1500 years of war. This raises more questions than just “What took them so long?”.
Maybe the dwarves took the saying “By our beards, Kemalok shall not fall!” a bit literally. Or did something changed else change their very nature? Another curious “coincidence”, no mention of either half-giants or muls can be found in any story beyond … two thousand years. Not that many documentation exists or can be trusted. History may be erased and rewritten numerous times over the centuries.
What if Kemalok was something more? Considering mundane military might is kinda irrelevant without psionic and elemental support, that stronghold must have had the pinnacle of Dwarven greatness. It can be assumed that there were several once, in addition to many cities and tribes of other races also lost to the sands of time. One would expect minor losses to sway the tide in a war, and more losses escalating with the last few falling quickly. How can one take so long? Why didn’t various races unite against the champions?
That brings me to my proposition that the “Cleansing Wars” were in fact civil wars. Schemes instigated by the champions behind the scenes.
The culmination of 15 centuries of scheming, Dwarven clans competed for the same type of areas and took to psionics and the elements to gain an edge. Some may have ascended to higher beings, ageless and powerful, looking beyond the mortal realm. In these those Dwarves may have been joined by Giants, and favoring the element of earth or of others favoring Fire. Descendents of these higher beings created bloodlines that strengthened the race and it’s ties to the elements.
These clans may have been offered the aid of magic of an arcane type, by a certain Borys of Ebe. Possibly Dregoth had something to do with this as well. This magic allowed higher beings with Giant and Dwarf origin to spawn a mixed race: Half-Giants. Never one clan, all clans wanted more of these among their numbers, even though they could only mix among themselves.
Finally after 1500 years, the populations of these special bloodlines strong enough, the fires of the civil war were stoked to a new level, literally, figuratively and metaphysically! The original unaltered bloodlines dying out may be helped with some scheming of the champions. Being of lesser status or even cast out, many joined the lasted of the mostly bearded clan, the stronghold of Kemalok.
With the Fall of Kemalok, Borys finally completed his task, replacing the old dwarven race with a new kind. For some reason Rajaat only knew, this was all just as planned.