Yesterday someone came here looking for “the terrible tax on gnomes”. I know because it was among the search terms that brought a referral. Obviously I must pay my Google Penance.
The gnomes of Telengard are a displaced people. Legend has it that long before they founded Gnomestead (in the north-east of the land called Telengard, after the terrible mountain) they lived underground, perhaps in the very caverns beneath Mt. Telengard. But this was many, many centuries past, and now they live above ground in halls and huts within the wooden palisades of Gnomestead.
Though the gnomes of Gnomestead have come to peaceful terms with the dwarves and humans who have displaced them, they remain standoffish and rarely visit the human settlements (Skara Brae, Clovis, and Porttown) and the dwarven undercity beneath Skara Brae. Instead they trade mostly with the peasants who still live outside of town walls, in the woods near Gnomestead, as well as with traders from the far-off Vulking kingdom. The gnomes, once masters of metalwork, trade mostly in wood and leather items, as well their famous Gnomeade ( a mead said to have invigorating — possibly magical — properties).
However even these trade relations have not made the gnomes completely safe, and the proud little people bear a terrible burden silently. In fact the gnomes pay an annual tribute to The Lord of the Forest — a tribute of living souls. When the gnomes can, they offer captured humanoids, but more often the bulk of their tribute is in gnomes — criminals, outcasts, and even innocents. What becomes of the souls given over to the Lord of the Forest none can say. The gnomes will not speak of this shameful practice, for the only greater shame than their thralldom would be to ask for assistance from the dwarves and humans who have stolen their underground empire and rightful gold. This shame is partly compounded by the fact that gnomes have already been saved by a band of human and dwarvish heroes at least twice in the past — long ago from a fire giant, and more recently from a witch who enslaved their astral bodies to work a mine in the Dreamlands. So now, they suffer in silence, paying a terrible tax that impoverishes their manpower (gnomepower?) and keeps the whole of Gnomestead under the shadow of the Lord of the Forest.