I have no desire to change the mechanics of the races, I am going to tweak the feel and flavor of them. Before I continue on with the tweaks to the magic system I should provide a brief overview of the races. There are going to be race/class restrictions that are related to the story and feel of each race. While this is not a complete description of each race it will over a brief insight and overview of each.
I am not using the Pathfinder ethnicities, but humans are as varied as they are in the real world. The gods they worship are varied in their pantheons from noble and just, to evil and depraved. Humans have no common alignment, although certain regions on the continent tend to have a unifying mentality or belief system that ties them together. Humans are only as good or evil as there desires lead them to be.
Dwarves are an old and ancient race that are as comfortable on the surface as they are bellow the ground. Dwarves are regimented, orderly, and at times viewed as cold since law, order, and logic are valued through out their society. Dwarves are a passionate people, but centuries of regimented militaristic living have taught them to push emotion aside when making decisions. Dwarves have a Norse style religion, that also has a focus on ancestor worship. They worship a god or gods within the pantheon that exemplify their personal beliefs but also have great respect for their family that came before them. Example: “Ragnar give me strength to bring glory to your name in this coming battle, for I Wolfgar Twinhammer, son of Vulgnir, son of Thoaden shale show no fear or mercy to the vile Orcs that I am about to crush in your name.” Dwarves are excellent wizards as long study, and understanding the mechanics of the nature of magic appeal to them. They do not posses the free spirited nature to be a sorcerer as the magic that flows through a sorcerer tend to lead them down the path of chaos.
Elves are bound to the forests, the plains, the rolling hills that they call home. They tend to live in tribes, some times nomadic depending on the environment they call home. What few elven cities exist are in large dense forests and rarely visited by outsiders. Elves worships the spirits of nature and animals that they hold sacred. They draw the energy for the magics they work from all living things around them. They are a chaotic race that are prone to flights of fancy, although when you live for over a 1000 years a new hobby or interest can occupy an elf for 100 plus years. Their tribe or society only has the amount of structure that is needed to keep it running. During times of peace they will govern via a council of elders, sages, or by consensus of the commune. When war arises the tribal Chief, or general of the city will take command and make all decisions regarding the society.
Half-elves have no communities of their own, they become a part of society of their mothers in most cases. On occasion a human will catch the eye of an elf, and more times then not the coupling results in a half-elf baby. If the mother was an elf the child is generally raised as an elf, treated no differently than any other elf (with the exception being in war like elven tribes). If the mother is human the child will most likely be raised in a human society and never be fully accepted. The elven blood coursing through her veins lets her work magic easily, makes her fickle, and curses her to watch her friends and family grow old and die while she barely ages. Half-elves born to human mothers can find acceptance in elven communities after proving themselves, and adapting to the elves way of life.
Gnomes are fickle and prone to flights of fancy. Gnomes tend to jump from interest to interest, however sometimes a Gnome will find a hobby or an interest which they obsess over. This interest will be there passion, and it can come between them and those close to them. Gnomes have no society of there own although some do gather together and form small communities. Generally though they will tend to make a home in human society they tend to get along with elves well and occasionally find homes in the elven community as well. Gnomes tend toward chaotic alignments and generally have a good heart.
Halflings tend to live on the plains, rolling hills, and edges of the forrest. They are a light hearted race that tend to enjoy the simple things in life. Their appetite rivals that of the dwarves. Halflings love stories both telling and hearing them, the more outlandish and grand the tale the better. This storytelling is normally enough to satiate most halfings need for adventure, but for some this is not enough they need the adventure of the open road or the hustle and bustle of a big city. Halfings tend to find professions that let them have the widest variety of experiences. The seldom like to be cloistered away studying and prefer to learn on the go or with limited study needed.
A half-orc is any Orc that is not of pure blood, and most are born of conquest. In Orcish society they are members of a lower cast or even slaves if their Orcish blood is highly diluted. Half-orc society exist where large populations have managed to break free of Orcish society. Over the centuries the half-orc societies grew into small villages and rumors exist that deep in the blighted swap a half-orc city has risen. Half-Orcs much like Orcs make pacts with demons, and dark beings from other realms. The half-orc warchief that rule half-orc communities answer to only two beings, the eldist witch, and the dark being/demon lord his tribe is in league with.