What the Arcanum manual has to say about elves.

My theory as to the origin of the elvish race will meet with great hostility from many quarters. Up to now it has been the commonly held wisdom that elves are an elder race than any other, but fossil evidence does not support this conclusion; humans and dwarves are the oldest races of Arcanum, but elves and giants came close behind. The first distinctive elves appear some 900,000 years ago, during the Epoch of High Enchantment. They are a product of Supernatural Selection, just as giants, dragons, and many other highly magickal species were.
The first distinctively elven remains were found in the region of the Drowned Woods, scattered in a layer of earth which also contained the bones of the famous Eltdon Wyrm. Between the saw-edged teeth of this ancient monster, paleontologist John Eltdon discovered scraps of mithril chain and plate, armor which has always been peculiar to elvish warriors. Since these bones have been dated to a time no earlier than 750,000 years ago, it can be concluded that the elven civilization was already well advanced by that time.
Elves can be distinguished from the other Median Races by the proportions of the body, the facial features, and the tint of hair, eyes and skin. They are not so tall as humans, averaging some 60 inches or 150 centimeters at most in height, and tend to be frail and slender in appearance, weighing six stone or less. The arms and legs are longer in proportion to the torso than in humans, and their fingers and toes may also be unusually long and thin. They have elongated and pointed ears, almond-shaped eyes, and small, delicate noses and mouths. Their skin is pale, ranging in shade from creamy beige through chalk white to a delicate, milky olive tone. Their hair is also light in color, and may be any shade from silver to cornsilk gold to green. Some rare specimens have brilliant, flame-red tresses, or even coal-black; elves seem to find these two colors particularly appealing, and may even be attracted to humans who have such hair. Their eyes are silver-white, blue, green, grey, or amber yellow. Often the color of an elf's eyes varies with his or her moods, flashing from one hue to the next as they are moved by different emotions. Color is not the most remarkable quality of elven eyes, however; their vision is also exceptional, allowing them to see in the dark and for very long distances, which renders them the most superb marksmen of all the Median races.
Elves are an inherently magickal people. Mystic vibrations within them are so strong that isolating the universal frequency of their tissues is a challenge, although it can be found by a process of distillation. Because they are saturated with magickal energy, elves are natural practitioners of the Art, and they have made countless generations of mages in Arcanum. By the same token, they have no natural aptitude whatsoever for the study of Natural Law, and have the greatest difficulty in mastering even simple Technology. Sometimes the magick within them is so strong that small Technological devices will not work at all in their presence, while large and powerful Technological devices may even make them violently ill. In any case, Technology is not something which interests most elves much, save that they decry the despoiling of Nature which goes on in the name of "progress".
It is difficult for humans to understand the character of the elven race, as they display a sometimes paradoxical blend of qualities. They are a peaceful, gentle people as a rule, light-hearted and fond of every kind of joke and prank--and yet they take matters of honor in deadly seriousness, and if provoked will duel to the death over an insult which might seem meaningless to a human observer. They love feasts, festivals and holidays, and spend much of their time in celebration; elves rarely employ themselves in any pursuit which humans might call "work". Nonetheless, the sin with which they tax most other races most often is that of "wasting time with frivolous things", by which they mean any concern one may have with money, or making an honest living! Elves are generous, charming, forgiving and gracious hosts ... and yet, at times, their arrogance can be well-nigh insufferable. They blatantly regard themselves as superior to any other race, with the possible exception of halflings, whom they seem to love inordinately.
Elves are philosophical in most things, and the classic elven arrogance most often displays itself as a mild distaste for other races and their company. This distaste is very seldom elevated to the passion that one might call "hatred"--except in the case of orcs, whom elves will kill at any opportunity that presents itself, and ogres, whom they regard as the epitome of all things big, stupid and violent - qualities which they despise. As to the much-discussed congress between elves and humans, elves have little to say about it, save for this: most humans do not understand that the elves they tend to meet abroad are very young. For the first few centuries of their lives, elven children are expected to run a bit wild. They wander in search of new experiences and adventure, and this is the time of their lives when they are most likely to form relationships with humans; both male and female elves very often "sow their wild oats" among humankind. In maturity, elves tend to settle down and keep to their own; it may be that burying several generations of short-lived friends and spouses causes them to lose the taste for human company. 
The Fair Folk are highly territorial, and group themselves by region; Glimmering Forest elves consider themselves a breed apart from the Gray Mountain elves. This is explained somewhat by the deep communion that all elves enjoy with Nature, especially the living forests of their birth. Some observers claim that they have seen elves speak in animal tongues, commanding a beast in its native speech; sometimes they swear an elf can hear the trees cry out, when they are felled by a woodsman's axe. Whether this is true or not, elves certainly exhibit a great love and respect for all living things, despite the pride they take in their skills as hunters and bowmen. Elven hunters kill only out of need, or in self defense, and never for pleasure; they abhor those who deliberately go abroad to collect trophies. 
It is impossible to make any final guess at the possible lifespan of an elf. The best estimate we can make is that they might live some 1,000 years naturally, without prolonging the duration of their lives by magick. However, it is very rare for elves to willingly allow themselves to die, or even age naturally, when magick comes so easily to them! A simple effort of Will can keep them alive and young for centuries. This being the case, it is considered very gauche to ask elves how old they are, especially if the elf is a lady. An elven maid who looks no older than seventeen may have seen five generations of men turn to dust in her time. If one has occasion to visit an elven city, it is best to take one's cues from other elves; usually one elf can sense automatically how old another elf might be, and will tend to address the person accordingly. If two elves of the same region meet, and are roughly the same age, they will call one another "brother" or "sister". If the elf one meets is a stranger from a different region, he or she is called "cousin". An elf who is centuries older is called "mother" or "father", unless one is trying to flatter. Elves over a thousand are called "auntie" or "uncle", indicating both affection and respect. Truly ancient elves may be referred to as "grandfather" or "grandmother". I have been in the presence of the Silver Lady of Qintarra, and heard even quite ancient elves call her "Elder"; what unimaginable length of life this may indicate, I cannot say.