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Pygmies is an ancient name, now dubbed politically incorrect, for a particular cluster of African and Australo-Melanesian ethnicities characterized by excessively short statures. Unlike humans with dwarfism, they have perfectly normal builds, they're just short - kind of like halflings from 3rd edition onwards.

Because pygmy is considered a dirty word these days, pygmies are pretty much never seen in /tg/ media. In the hoary days of the late 70s and early 80s, Warhammer Fantasy had a minor human faction native to Lustria called Pygmies, who are short, rotund, cannibalistic African caricatures described as being a result of experiments conducted by the Slaan on humans who weren't lucky enough to be turned into Amazons. Games Workshop considers them an old shame, and is adamant that they will never ever be re-introduced into Warhammer canon, even going so far as to have a Blood Bowl comic in which an Amazon team competes because the warrior-women ate the original pygmy team that was going to be there (and who'd been planning to eat them first). The final nail in the coffin came from author Josh Reynolds responded to fan questions about The End Times, where he stated that the Pygmies got wiped out along with the Amazons when chunks of the Chaos moon destroyed Lustria and the Southlands.

Wild Dwarves from the Forgotten Realms also borrow a lot from pygmy stereotypes, or at least did back when they were introduced; they were heavily downplayed in 3rd edition, and haven't been seen since.