The story of the Petty-dwarves is one of the saddest in the whole history of Middle-earth, despite how little is known about them and how little role they played in the events of the Elder Days.
The origin of these Dwarves is diffuse and unclear because it is said that they were individuals from different houses of the Dwarven race who dwelt in the East during the Peace of Arda (at the time of Melkor’s imprisonment).
For some unknown reason, they were exiled from the eastern city-kingdoms, so they joined in their pilgrimage to the West. There are several theories about the causes of their expulsion: possible malformations and thorough repudiation of Dwarves who had some defect. However, it is most likely due to some issue related to bad behavior or problematic individuals.
Over the years, the Petty-dwarves advanced and crossed the Blue Mountains to reach Beleriand. They were the first Dwarves to set foot in those lands long before the construction of Nogrod and Belegost.
In Beleriand, however, they were not alone since, in some regions, there were the Sindar Elves, who, under the command of King Thingol, had established their dwellings during the Great Journey of the Eldar.
At this point, different versions of the first contact between the Elves and the Petty-dwarves appear again.
In one of the versions, the Sindar mistook the Dwarves for wild animals because they were elusive and only found at night. Therefore, they hunted them for many years whenever they found them.
In another version, it is said that the Sindar did not know of the existence of the Petty-dwarves until they began to attack them for no apparent reason, which is why they started to pursue them, as they considered them a threat.
Whatever the reason, the Petty-dwarves quickly dwindled in Beleriand and became even more elusive and cautious. They were wary of orcs and Sindar alike, making them very difficult to see.
Fortunately, when the Dwarves built the cities of Nogrod and Belegost, they began dealings with the Sindar. When that happened, the Elves realized that the Petty-dwarves were related to the Dwarves, although they were even smaller and more sullen (if possible).
Knowing that they left them alone.
However, this tranquility did not last long. The arrival of the Noldor was a new pressure factor on the Petty-dwarves, who saw how the newcomers occupied some of the places where they had lived. The best-known case is that of Nargothrond, caves that the Petty-dwarves discovered upon their arrival in Beleriand but that Finrod Felagund (following the advice of King Thingol) decided to make their new home.
The Dwarves were not simply expelled, but Finrod negotiated with the chief of the Petty-dwarves clan, named Mîm. They agreed that the Dwarves would help construct a fortress in Nargothrond in exchange for a handsome reward.
However, the hatred that the Petty-dwarves professed to the Elves and, in particular, to the Noldor (whom they accused of usurping their homes) pushed them to betray them. After trying to assassinate Finrod while he slept, the Dwarves were expelled from Nargothrond, and the remaining clan members took refuge in Amon Rûdh.
In that enclave, they continued to dwindle until only Mîm remained, whose future in the history of Beleriand would cross with the misfortunes of Hurin and his people, who found in that refuge a perfect place to establish a secret meeting place. Those Men, however, would suffer the meanness of the dwarf in a new story of betrayals and significant losses.
The outcome would be terrible, and one of the consequences was the death of Mîm. With him disappeared the last member of the Petty-dwarves. The clan was extinguished forever and became a distant legend.