In my Ezzin setting, Halflings aren't a native species. Neither are humans actually. Humans and halflings are certainly present now; all sorts of beings arrive through the portals. Most of the PCs will originate elsewhere, having been whisked away by forces unknown and transplanted into Ezzin. It's all very "Land of the Lost".
Honestly, no one is really certain anymore who the true natives are. Many assume that the various species of critterlings originated here, but that's open to debate.
1. Pick an animal
2. Morph it into a 3-4ft tall biped
3. Most (but not all) have halfling limitations, abilities, xp, and saves
Some species have very different class abilities. Goatlings have a strong predilection for necromancy. Pandalings can be kung-fu monks. Mouselings can have access to all the thief abilities. Ratlings sometimes become assassins. Maybe I should start posting some of these as customized classes?
While there are still villages of only a single species, modern critterlings are willing to live and work together. Their society is much like that of humans. They work together in towns and cities, each using their talents for the good of the community. Social status and occupation are not determined by species. Critterling leaders and politicians are especially diverse. However, there are certainly stereotypes. Molelings can be found digging tunnels and working the mines. Beaverlings work in construction. Piglings are greedy politicians. Donkey/Ass-lings are country yokels who tend to the herds of buggalo, flocks of small dinobirds, and squirms of mammoth woolly worms.
Tourist Tip: Manimals are the man-sized animal bipeds who live out in the wilds. They are far less civilized. Referring to a individual critterling as "a manimal" is an insult, it's a clever way to call someone a "stupid brute".