My understanding is that the word's use has morphed over time and it could be used to mean ethnicity back in the day (probably still can, I'd expect "Irish race

My understanding is that the word's use has morphed over time and it could be used to mean ethnicity back in the day (probably still can, I'd expect "Irish race", "Scottish race" or "English race" to parsed as intended in most contexts). Given how D&D uses it the people who wrote the game interpreted "race" to mean anything basically humanoid that looked systemically different which seems like a reasonable take for the times. Then people rolled with it because we're generally talking high fantasy where science has no meaning and "race" rolls off the tongue better than "species".