Halflings were nomadic farmers and shepherds roaming the plains of Hadira on Twilight World until the Arethian Empire colonized their land and after the Halflings lost a devastating war they were forced into near-slavery. During this hard time for Halfling kind they became so adept at waging a silent rebellion the Humans didn't even realize there was one. This expertise at guerilla warfare and self-sufficiency allowed them to survive Nightfall and the subsequent invasion by the Drow a lot better than human kind as they isolated themselves using a combination of their ancestral husbandry skills and a unique knot-based magical language to fight a guerilla war riding their ponies and shooting their surprisingly powerful bows
Since The Reckoning Halfings, lacking an oppressor for the first time in centuries, have mostly been fighting themselves and the numerous smaller families have merged into four larger tribes, which they still call families: Dragon family, Eagle family, Flood family and Fang family.