[@Gisk] 

If we are going to do an overlapping realms or different planes of reality, I think it would be interesting to take an approach similar to the recent God of War game. If you aren't familiar, what I'm thinking is planes or realms that exist in the same relative "space", with one gateway that connects all of them together. There could be multiple realms based off of the grandeur of this setting, but something along the lines of a "common realm" with humans- a very low-magic realm, an elven realm, though maybe multiple (for the light elves, the dark elves, etc)- most likely very high in magic. There could be a plethora of various "realms". 

If the elves exist on the same plane as other races, I like the idea of them living underground, with vast expanses of their kingdom via Skyrim's light elves/dwarves. Tunnel systems for days, crossing continents of the planet.

I think [@Sierra] is right with her take on the "house" system. Instead of houses between the dark elves, we should just have clashes between races, with all dark elves united under one empire. My interest in this roleplay isn't contingent on that, though.