Iron and Leaves
Unions between humans and elves usually do not produce children, but sometimes they do. Those children, when they occur, are usually indistinguishable from humans. A portion, however, are half-elves, combining traits of both parents. These half-elves are usually poorly accepted in elven society and are more likely to live among humans.
Most half-elves, however, are born to two human parents or two elven parents.
In a past age, the first Dragon Emperor and the Elf Queen allied to destroy the wizard who later became the Lich King. After their great victory, half the children born to both humans and elves for the next twelve years were half-elves. Neither the Emperor nor the Queen claimed responsibility for the event. They both said that it was a spontaneous magical consequence of the great victory the peoples had won together.
Since then, half-elves have served as a symbol of friendship between the races. Beyond symbolism, they are generally welcomed in both human and elven society. High elves, of course, are snootier about half-elves than are the wood elves, but nowhere near as snooty as they are about humans. Dark elves mistrust half-elves who have spent too much time with humans, but no more than they mistrust other dark elves who enjoy the company of humans and dwarves.
The Elf Queen sees half-elves as a means of extending her influence into the Empire. She’s not wrong. The Dragon Emperor believes that so long as half-elves are spontaneously born throughout the Empire, the Elf Queen will not betray him, and so far he hasn’t been entirely wrong.