Its just because I dislike the generic Elf, Dark Elf and Dwarf faction names that seem to show up in all fantasy games. I wanted something more flavorful. Ljosalfar and Svartalfaar aren't my creation, they are the names of the good and bad elves in Norse mythology (hence the scandanavian roots of the words). There were many elven civilizations in the FfH D&D world but they tended to be small and decentralized so nothing was really fitting for a full civilization.
The Khazad name I think is from Tolkien, I think Khazad-dum is the dwarven name for Moria. Again the dwarves are much smaller and more scattered than human nations so I didnt have any major civ to use.
I tended to have very few demi-humans in my D&D games. If the party met an elf or dwarf it was a pretty big deal. Probably one of the reasons I tend to attempt to retain the flavor of the various fantasy elements by using it sparingly (be it vampires, werewolves, dragons or whatever). Its also probably why the large portion of the civilizations are all human. Which just seems natural to me, but at least when the origional civ list was released seemed surprising to a lot of people.