Here's what I now got since, I did some research of my own. Honestly, it's not my work and what I did do myself is based on the work of Slaine author Pat Mills and Ian Sturrock author of the official role-playing game of Slaine. I read a bit, and then some more from books I own and what the internet had to offer and then prompted a question to an A.I. Story Writer (Yes, I know it's a bad thing to do, but I felt alone here...) to see what insightful know it would offer me on top of using everything, I put into prompt...(these are my own words)
Dwarves that roamed Tir-Nan-Og are what became of the Fey or the Sidhe that stayed in the mortal realms after the sinking of Atlantis. With that, their fey powers dwindled and they became likened to a degenerate species of short humanoids with rat like features. The Dwarves of Tir-Nan-Og. While some mingled with the Titans. A prosperous race of Giants. From there they became the more classic dwarves known as Titan-Dwarves. Proud and noble craftsmen, guardians of ancient lore and keepers of earth's secrets with stout bodies and long thick beards...
There is more...
On a related note... this is what I have thought about the Tuatha-De-Dannan (Celtic Gods and Goddesses including thunder thighs herself... ) and the Sidhe were in their hey day and hypothesized that according to Pat Mill's Slaine. They must have occupied the great island and city of Atlantis in their own separate regions along with the mortal peoples. Who soon became the Inhabitants of Tir-Nan-Og after Atlantis sunk. They entered their own El-worlds or the Celtic Otherworld or Annywn. Those of the Tuatha-De-Dannan that stayed in the mortal realms became demi-god (but mortal...) heroes, and those Sidhe that stayed in the mortal realms became... You can see where this is going... the degenerate race of Dwarves. While some of those Dwarves mingled with the Titans (Perhaps former inhabitants of Atlantis themselves...) to become the less degenerate Titan-Dwarves of Slaine's day on Tir-Nan-Og.