One of the reasons I like Gothic settings is my assumption that, by default, all player characters are human. In an upcoming game that doesn’t take place in the Forgotten Realms (probably Krevborna again), I wrote the following:
In this game, all player characters start as standard Humans. Outside of that restriction, everything about your character with the wide spectra of humanity is your choice: skin and hair color, height and weight, gender and sexuality, etc. Other lands lie outside the specific setting, so you can work with the DM for other ethnicity or nationality options.
The reason for this isn’t really diegetic in nature; other people run Gothic games that do have elves or dwarves or tieflings or whatever. But this comes down to my distaste for “race” as implemented in most RPGs, including D&D. The term itself stems from colonizers wanting to enforce social hierarchies and pretend that significant differences in ability and interests exist in large groups of people. The way D&D implements them feels a lot like race essentialism.
Other people who know way more about this than I do have written lots of good stuff about race and RPGs, and you can find them with a quick Google search. Lately, I’ve been paying attention to James Mendez Hodes, but many others are out there.
So, in lieu of some alternate model, in my 5e games I really prefer just to have everybody start as a standard Human. (I have unrelated issues with the variant Human, which starts off with a feat instead of some extra ability points, but they don’t come from this problem.)
If I were running a game in a different setting, I don’t know how I’d deal with it. More research to be done on my part, of course, but the default D&D assumptions really strike me as gross.