Some people choose to use the word dwarf to refer to little people, or people born with a condition that causes their growth to be stunted. If you have a dream in which you are a dwarf of the variety that has a biological condition which causes their growth to be stunted then this means that you feel like you are being kept down or out of the loop of life. You feel like there is something which is stopping you from making progress or there is something getting in your way. Have you just gone through a time in which you felt like you were being held back or has someone just stopped you from doing something that you thought for sure would mean a lot of progress for you in your life? If this is the case then this may be the reason why you are dreaming that you are a dwarf.
If you dream that you are surrounded by the same kinds of dwarves mentioned above, but you yourself are normal, then this means that you feel like you are a level above everyone else. You have done something which was worthy of the notice of others and you now feel as if you are a level above the competition. This is a good thing and very positive. It means that you are achieving your goals the way you want them to be and you are finally making some progress. Be careful not to be too consumed with this attitude of self importance in real life though because it can come off as very uninviting. Nobody wants to be around someone that is too braggy or too concerned with their own greatness. Your achievements might not seem so great to other people, so just make sure to have a healthy self esteem while not being too ridiculous about it, because if that becomes the case you would be getting nowhere in life.
Dreaming that you are a dwarf of the magical variety or that you are living in a colony of magical dwarves means that you feel like you need some escapism from your life. You can feel like you need to escape for any number of reasons. Perhaps you are bored and you need something more exciting. Leading the life of one of the characters in the lord of the rings film would certainly be pretty fun and it would give you a great excuse to leave your real life every now and again to adventure in your mind. Sometimes when you go through a lot of stress at a place like work or school if you are a student, this can lead to a need to escape. This is why people procrastinate so much on important projects because it allows them to get out of their own mind for a little bit and into the mind of someone else. It gives you the ability to leave the boring behind and go into something new and probably a bit more exciting than what you’re used to so you don’t have to think about how mundane your real responsibilities are. These are the main reasons why you might dream about a dwarf, or dwarves.