Small World
http://boardgamegeek.com/boardgame/40692

I've gotten to play a couple of games now. It's a light risk type war game. You earn one gold for every territory you control. It cost two troops to take a territory plus one troop for every other token in the territory.

Example: I have 3 Elves in a territory. My opponent would need to play 5 troops to take the territory, 2 for the base territory + 3 for each elf token. Simple right?

Now add that every race has a specail ability. AND every race gets an additional random ability. Some ablilities allow you to take 'hill' territories for one less troop or able to attack non-adjacent territories.

The final twist of the game is you may have one 'active' race and one 'declining' race. A race on the decline still scores territories however they lose their special ability and cannot take any further territories. You may choose to put a race in decline once they have used up their troops. This mechanic is fantastic! So come on and enjoy it!

But the real question - are there dwarves involved?

Yes there are. In fact the cover has them asleep with a booger bubble brewing.

The real fun of this game is in the weird combinations that show up.  Diplomatic orcs, flying giants, and berserker haflings?