Vriishnak’s got most of the basics: in the
really olde days, before the collapse of the polar warpgates, dwarven clans expanded east across the World’s Edge mountains, and set up cities and towns in what is now the northern half of the Dark Lands. When the warpgates collapsed, they were far closer the source of the cataclysm than their brethren, and unshielded by the stone walls of the mountain keeps (stone having anti-magic properties – ref: Stone Trolls) – they became corrupted and mutated, and as their kin retreated within their holds, they also lost all contact with the Dwarf Empire. The lands they inhabited became a blasted wasteland, known today as the Dark Lands: the Dark Lands are still saturated with chaotic energy.
Chaos Dwarves were generally mutated in one of three ways:
“Chaos Dwarf” – their lower canines lengthened and broadened into stubby tusks, and their minds were turned to cruelty and dark pride.
“Bull Centaur” – as well as growing tusks, their lower bodies warped into those of red-furred bulls, making them like the Centigor of the Beastmen. These dwarves became particularly savage and bloodthirsty, although they retained their warped intelligence.
“Lammasu” – losing all semblance of dwarf-kind, these were probably runesmiths or other wielders of magic to begin with, and were warped into vast, sorcerous beasts with black-furred bull bodies, the wings of a gigantic bat, and the grossly distorted and charcoal-skinned face of a Chaos Dwarf. They breathe Dark Magic, and while they are no longer truly sentient, manipulation of the Dark Winds is second nature to them.
Dwarves are naturally resistant to mutation, which is why their mutations were mostly minor and/or stable: those which did degenerate into mewling Spawn were quickly put to the death by their erstwhile comrades. Feeling they had been abandoned by their kin in the mountains, they set about forging their own kingdom in the wastes they now inhabited: claiming the Ancestor Gods had abandoned them, they turned to the worship of Hashut, the bull-god of flame and pain, and renamed themselves the Dawi-Zharr: Dwarves of the Place of Fire. Hashut gave them full licence to practice sorcery, and in their new forms they found it was no longer beyond their limits: the Chaos Dwarf sorcerers are now practically the ruling caste, manipulating magic of fire, metal and stone to subjugate their enemies and maintain their position. Dwarven bodies are unsuited to the use of magic, however, and so over the centuries the dark forces gradually turn these dwarves’ bodies to solid stone, starting at the feet and working up. Those who have become completely petrified line the avenues leading up to the great ziggurats of Zharr-Naggrund, statues to greatness past.
Determined to survive in the hostile environment they now found themselves in, they built a huge, towering capital in the northern wastes, the sprawling city of Zharr-Naggrund: dominated by stepped, cast-iron ziggurats reminiscent of the temples of Lustria, Zharr-Naggrund houses pretty much the entirety of the Chaos Dwarf population, with the remainder being stationed in fortresses commanding the rest of the Dark Lands. The cataclysm of the Old Ones had rendered many of them sterile, as well as directly killing off a good deal of their number: reduced and unable to breed with anything like the requisite rate to prop up their population, they turned to slaving and technomancy, using arcane devices and massed slave labour to build their great edifices and keep the wheels of their aggressive expansion turning. The extensive mining and smelting required to produce their superior equipment and evil war machines poisoned and crumbled the land for many miles around Zharr-Naggrund, creating the toxic wasteland called the Plain of Zharr that occupies most of the northern dark lands. The fumes have also tainted the southern lands, already ravaged by the taint of chaos: creatures that live on these plains are generally sickly, mutated things, with nasty, short and brutish lifespans, as the pollution of dwarven foundries drives them swiftly to death. The Chaos Dwarves have lost all the respect for the world that still holds their brethren from doing the same, and view the entire planet as a helpless resource to be exploited for their own ends. The situation in the Dark Lands has not been helped by the construction of the Tower of Gorgoth – built upon a towering plateau in the centre of the Dark Lands, the Tower is not only a military stronghold but also the site of the largest mine-works in the world, belching corrosive and poisonous fumes into the hot, stale air day in and day out as armies of slaves toil extracting the precious seams of metal that lace the plateau. The Chaos Dwarves have become the world’s premier industrial power, although few outside their kin actually know of them: they sell weapons and armour to the Ogres and the armies of Chaos in return for slaves, who are either set to work in the mines and foundries or are sacrificed to the dark god Hashut who has brought them so much strength.
Early in the formation of their empire, the Chaos Dwarves became frustrated with the quality of slaves available to them: limited to Orcs, Goblins, and the Hobgoblins native to the darklands, they were generally either weak, backstabbing or unruly, often rebelling and forcing repeated bloody reprisals on the part of the Chaos Dwarves. With this in mind, the Sorcerers set about creating a “master race” of orcs, intelligent, obedient creatures with enhanced strength and endurance that would prevent these occurrences and increase the competence of slave labour. Unfortunately, they were too successful: the orcs they created were unnaturally intelligent and strong, and immediately led a rebellion that almost crippled the nascent nation of the Dawi-Zharr, with all the greenskin slaves at their back. The Chaos Dwarves only won when the Hobgoblins were persuaded to stab their masters in the back, and the Black Orcs were driven out of the Dark Lands: since then, the Chaos Dwarves have drawn more heavily on other races for their slaves, and have had a long-standing pact with the Hobgoblins: the Hobs provide massed cannon-fodder and light cavalry for the Chaos Dwarf slaving armies, and in return the Hobgoblins are not themselves exterminated and/or enslaved en masse. Neither faction trusts or likes the other, but the key of it is that they both hate everyone else more.
The most frightening aspect of the Chaos Dwarves is really their technologically superior armies: their equipment is mass-produces and of a high quality, and they invariably bring war machines that are more suited to the industrial age than to the renaissance to the battlefield. They have already perfected the Earthshaker Cannon - a kind of giant mortar that fires explosive rounds and can tear the heart out of a regiment while knocking everyone nearby to the ground - the Death Rocket, a chemically-propelled alternative to the Bolt Thrower, and the Blunderbuss, a blackpowder infantry weapon that can devastate enemy infantry at short range. Each Chaos Dwarf soldier is heavily armoured, well-equipped, skilled, and cruel: they are also supplemented by hordes of Hobgoblin vassals, who can deploy large screens of cannon fodder and fast wolf riders in great numbers. The Chaos Dwarves also have fearsome heavy cavalry in the Bull Centaurs, and powerful sorcerers whose magic is focussed mostly around killing. In essence, they are dwarves with all the weaknesses removed, and most of the strengths enhanced: their only real disadvantage compared to their mountain brethren is that they do not rate warrior prowess or courage so highly, and so are both more cowardly and lacking in elite combat infantry (although basic Chaos Dwarves are pretty elite in human eyes).
Hope this has been helpful;
LCP
EDIT: Found thee a map. It got shrunk a bit in my hosting it, but I've circled the Chaos Dwarf settlements/fortresses. The most northern one is on the mouth of the River Ruin, opening onto the sea above Norsca: that's where they trade with Chaos, I think. The two to the South-East may not be CD fortresses, but I'm under the strong impression that they are. The Tower of Gorgoth is the one on the central plateau, Zharr-Naggrund is the one in the north in the middle of the big, cliff-rimmed crater.