ELF
E.L.F. stands for Engineered Life Form. It's a human who has got the best in Genetical Engineering. Of course it was very expensive and difficult to do, so has been available only to the wealthy elite who then found a way to keep it for themselves. Hence a human society ended having castes. ELFs (or elves?) thus got a much longer lifespan (almost 700 years), better perceptions (+2 bonus to Spot, Search, and Listen, and Low-light-vision); stronger minds (+1 bonus to their Will saving throws); and a better physical appearance resulting in a +2 bonus to Dexterity (gracefullness and agility). They are generally much more beautiful, but don't get an increase in Charisma because they also are haughty. Then, being born in nobility and leading soft lives, as well as having a body somewhat weaker for being a genetical engineering creation rather than naturally selected genes, they get a -2 to their Constitution score.
ORC
O.R.C. stands for Originally Repulsive Creature. This is how were nicknamed those unfortunate humans whose rich parents tried to get an ELF but the result was flawed. The children were born elven-looking but in growing turned ugly and bestial. As a result they were rejected from the wealthy elite caste and ended as shunned outcasts. Since there was many such defects, they eventually formed a community of their own. They were brigands, who eventually intermarried with normal humans, producing half-orcs, so in the end there is a whole community of orcs and half-orcs. It is their engineered disgrace and unjust rejection that made them aggressive people, especially hateful of "elves".
