The New Kingdoms cared little for the civilised veneer of tolerance practiced in the Old Kingdoms. Dwarf and Man may rub along, cheek by jowl, in Basilea, but out here a man was a man, and not afraid to call a grubber a dirty, earth-sucking grubber.
The Dukedom of Estorium was no different. Of course Dwarves were allowed within the city walls, but best they didn't show their faces in the more affluent neighbourhoods, or, conversely, the less salubrious taverns. And, of course, nobody wanted to see the dirty devils sneaking around after dark, no doubt using their demon-spawned night vision to spy on the girls and women of the town in their bed-chambers.
The Dukedom's small Dwarven population kept their heads down (...), sticking to the trades, such as general shop-keeping and money-lending generally despised by the humans. Things, however, got decidedly worse when in an apparent random act of carnage a young Dwarf trader, Gunthersson, killed two offspring of two off the Dukedom's noble class, before disappearing into the hills, eluding the posse mounted men-at-arms sent to hunt him down. The bodies of the young men, bludgeoned almost beyond recognition by a hammer or mace, outraged the people of Estorium.
Rumours of Dwarvish worship of the Abyss, of human children abducted and murdered in gruesome rites, of poisoning, of barn burning and all manner of dark deeds were legion. In righteous self-defence mobs rampaged through The Dwarf quarter on more than one occasion. Rather than reign in the mobs, the Duke levied new taxes on the bearded folk, introduced identification papers which Dwarves had to present upon demand, and began a wave of arrests, looking for Gunthersson's co-conspirators or other Dwarven degenerates.
Some Dwarves, remembering past waves of persecution, kept their heads down, waiting for blood to cool. Others fled to other New Kingdoms, leaving their little wealth behind - hoping to find persecution at least a little less vile. Others still whispered of Gunthersson, or of the mighty Molloch, at who's feet humans - even Basilea itself - trembled. They whispered of salvation and vengeance...