Actually, I don't want to "do away with them." But I want to make them more...alien. More..."not human." I really want a stark separation between humans and demihumans - that they don't mix at all. Of course there will always be exceptions - some tiny, isolated areas and individuals - but the rule is that humans and demihumans live in different worlds.
Elves are the exiled immortal one-time fallen servants of the Creator God. They remain isolated from humanity because thousands of years ago, before the Great Storm (when humanity was excised from Daen Ral), the elves were enslaved by humanity. The enslaved elves rose up and overthrew their oppressors. Not willing to suffer that injustice again, they isolate themselves from human beings to the point of killing interlopers (the irony of it is that most elves in fact have human blood in them - the full blooded Exile or Firstborn are extremely rare). So, what does that society look like?
Dwarves were staunch allies of the elves and humans before the Great Storm. When the elves "cleansed the land of the human taint", the dwarves cut off all relations with elves (finding the elven action too extreme - the oppressed had become the oppressor) and sealed themselves up in great caverns and underground cities (previously, they had been surface dwellers). When humans landed again on the shores of Daen Ral, the Dwarves welcomed them openly, but found the humans who invaded the new world to be more barbaric and warmongering than they remembered. When a plague broke out among the invaders (and the dwarves), the invaders blamed the dwarves and sought to eradicate them (the truth is, the plague was brought by the invaders themselves and spread to the dwarves, who were even more susceptible than the human invaders, nearly wiping out the dwarves - hence the number of dwarven ruins dotting the mountains of Daen Ral). So, what does this society look like?
Alien - un-human and...anti-human... But not evil (not as a whole race, that is)...
And Faerie - I'll get to that too (man, I've got a lot on the back burner here...)