While characters are not required to be human, anything else is likely going to cause a problem. The occasional elf or dwarf pops up here and there, and some of the larger settlements may even have neighborhoods where certain non-humans congregate. For the most part, through, non-humans are not going to get a fair shake on Eradu.
The dwarfs lost their war with the underworld. They are a homeless lot, wandering miners and mercenaries that scrape by doing dangerous things and drink away their earnings. They are a dour folk who are generally unpleasant, far too serious, and tend to wax on about the old days of the Grand Kingdom. There aren't many dwarf alive today that can truly remember the Grand Kingdom, but the dwarvish skald tend to keep stories (and pain) alive in memory.
Numerous dwarf clans once existed, and it is said that it was their constant bickering that caused the dwarf kingdoms to fall. It is strongly advised for all travelers to avoid this discussion. Nonetheless, if more than one dwarf is nearby, they tend to begin to argue the finer points of long dead politics, the obvious outcomes and results of the politics, and how it is likely that the other dwarf's ancestors were likely the reason for the loss of Jort Hyen or Ythmor Hall. As these discussions are often soaked in ale, they reliably end in a brawl.
This behavior, plus the utilitarian nature of the dwarf life (although they do seem to have some sort of soft spot for foppish hats and complex bear weaving patterns) is why folks tend to steer clear of the stout fellows. They tend to bring trouble, or are the harbingers of dangerous times. The other reason for this is that many dwarfs have an innate skill of Dungeon Lore (instead of mining, 50% chance) and are likely to discover a dungeon bloom in the nearby vicinity.
Elves both terrify and fascinate humans (often in the opposite order). They are similar but endowed with a strange alien beauty that belies something sinister (or at least utterly self-absorbed) in the elfin heart. Elves are creatures still attached to the faerie and are therefore unpredictable at best, and destructive at worst. They tend to wear exquisite finery (even their adventuring gear is well made and stylish) which only adds to their allure.
The mind of an elf is a strange place. They have a penchant for arcane magics from the linger fey blood that courses through their veins, and because of their longevity, generally do not interact well with the short-lived humanoids they so often despise (most elves suffer from the Racism quirk). An elf is just as likely to lend a hand in raising a barn with a group of struggling outland farmers, then burn it down as some sort of a joke a year later, laughing hysterically while the farmers are forced to watch in arcane stasis.
Humans that know will steer clear and attempt not to anger an unknown elf. The curious tend to fawn over them. Elves, who in general believe themselves of ancient nobility among the races, find either of these attentions acceptable. When not being batshit insane, elves do tend to make fantastic adventuring companions as they can wield a sword and shoot fire from their hand with equal skill, often understand the wilderness at a fundamental level, and have no compunction when it comes to some of the more morally questionable activities. On the flip side, monstrous humanoids love to dine of elf flesh, and elves tend to get a bit crazy about that.
Half-orcs are not inherently terribly stupid or impulsive, but the neglect or endless taunting of their upbringing tends to install those thought patterns. From that, plus their innate toughness and strength, half-orcs tend to become thugs and thieves of of necessity. Their thick hide is not just physical, but mental as well; mean-spirited comments about looks and parentage are common.
The bloodline that half-orcs have gives them one additional advantage. They understand the dungeon, as part of it courses through their veins (two rolls for Dungeon Lore). Random dungeon events are slightly less likely to happen to half-orcs, and their superior senses allow them to become perfect forward scouts for any dungeon delving party of adventurers. Also, they tend to kick ass and win fights.
The following races from the PHB are not allowed as player characters in the Eradu setting:
Gnomes: these small folk (related to dwarfs) have a special purpose and tie to the underworld.
Gnome Titans: only rumors of these battle gnomes exist.
Grell: evil enslaving NPC elves are not a PC race.
Half-Elf: the rare cross between an elf and human is always human, although often quite beautiful.
Half-Hobgoblin: no civilized hobgoblins as in Kalamar, therefore no half-hobgoblin.
Pixie-Faerie: uhg, bwarf, lame - the only thing worse is a pixie-faerie bard/monk hybrid.
What About Halfling?
Halfling are integrated into human society and, even in their own communities, not considered a problem. They are just halfing after all. SHort, round, and genial ... other than the fact that they are all thieves and liars and probably lazy, not to mention they tend to hang aournd wizards which, as we all know, are infested with the underworld and probably hollow already. Nothing special to write about halfling ... rotten little buggers.