Gods feed of cosmic energy. How do they get this energy, though, is the real question. The answer is simple, yet shocking. By using their creations as countless little factories. Same with every other world they have created, the Lands of Arda work the same way. Fragments (gods) arrived and created sentient beings that will say prayers in their name, act on their behalf, or simply perform tasks. Thus, all races were designed according to one or more fragment's design, to return as much cosmic energy as possible in the long term. Elves were made to have a natural love for nature, because Laia benefits from that. Orcs are naturally evil, because Zeriax benefits from that. Gnomes are innately inventive because Iskar benefits from that, and so on, so on. Furthermore, the gods also feed from performing actions that associated with a concept they have blessed. For example the act of murder, every time performed, feeds cosmic energy Zeriax, Krevor, Dominaria and Izalith.
While there is a certain degree of freedom and evolution, most races have innate genes places by their creators that drive them towards certain actions or behaviors.
Consequences
To guarantee that their creations would keep feeding them back energy and would act according to their design, the gods made the genes of the different species incompatible with each other. Making it impossible to have offspring from genetically different parents. Two exceptions were made to this, and those were the offspring of an Elf with a Human and the offspring of an Orc and a Human. That way, each race maintained the original instincts and fed the original gods. Vary rarely, by divine intervention, a child from different species is conceived. These children develop powerful magic from early stage and are known as High Sorcerers, which are respected and feared by society.
Some creatures try to deviate from the genetics. While not impossible, it's a struggle against their very own nature and very difficult. Cases like that are definitely exceptions and often perceived as irregularities by their kin and others.