There is a pecking order to the races, based on their order of arrival on the Peninsula. When humans arrived, gnomes were already well established. The oldest gnomish texts declare that kobolds were actually the first race on the continent, but only recently developed any meaningful culture. Dwarven myths tell of a great migration to the largest mountain on continent and merely note that the kobolds and gnomes were ever present. It is unclear if this was by land or sea, or entirely underground. Half-Orcs arrived just after the humans via a shipwreck, while half-elves appear to have suffered the same fate. Both races have never had a great population and rely on both the elves and dwarves to survive. The last two arrivals were the halflings and gnolls, who are fleeing a great war to the north.
The cause of the war between the humans and elves was slavery. The outcome of that war was that humans will not enslave non-humans... or else. This war occurred 2 centuries in the past and accidentally saved the Empire from economic disaster. What is left of the Empire is struggling to reclaim land depopulated in the war and resist invaders from the north while trying to juggle a rising abolitionist movement. Humans who live in rural areas tend to be very relaxed about other races and sometimes will cede nominal control to invaders rather than resist. There are exceptions, but rural people are pragmatists.
The last two invasions were the halflings and gnolls. Humans view them as a nasty barbarians, if not animals. Since the war with the elves, humans have no intention of taking prisoners or slaves from the halfling or gnollish peoples. This attitude has the Elven and Dwarven Kingdoms readying for war.
Three races are very special on the continent: half-elves, half-orcs and kobolds.
The half-orcs are insular when it comes to breeding and only marry their own kind. However, they are claimed as citizens of both the Elven and Dwarven Kingdoms, as their past actions have saved both from conflict and disaster. They are considered keepers of the peace, justices or knights to each kingdom.
The elves believe that the half-elves might not be half-breds at all, only shipwrecked people who went native. Humans hate half-elves as they believe the mixing of races is deeply unnatural.
Kobolds are special because it seems they come in two kinds, the civilized race and the terrifying stuff of nightmares. Humans have a mythos of small house spirits like the Kobolds and the idea that they could turn evil on them is repugnant. The civilized race has adopted some strange characteristics from humanity. They behave as stylized humans, living in tiny villages and worshiping equines of all kinds. They have a deep misunderstanding of the Empire's equestrian class of citizens. They literally believe that these people are some sort of were-equine and not merely someone who can provide a horse in defense of the Empire. Their odd behaviors and the fact that they are emulating humans vexes others. They tend to view all other races rather positively in the hopes of gaining trade partners. They are someone bothered by the fact that gnolls prey on both kobolds and more importantly, horses. Kobolds have a special love of halflings and their ponies, while halflings view them as savages who might eat the baby or the family dog.
Peninsula of Plenty - Racial Preference Table