The War of the Beard (The War of Vengeance)

The War of the Beard (Or the War of Vengeance as known by the Dwarfs) was the bloodiest conflict in Warhammer Fantasy Battle's history. Because really, only Elves and Dwarves can hate each other that much to spill more blood than anything else in a Grimdark universe. Famous for being one of the few major wars that didn't feature orcs, skaven, undead, dark elves (directly, since to some they instigated the war) or chaos as the bad guys.

What Could Possibly Go Wrong?

Before the infamous War of the Beard, the Dwarves and the Elves were at peace. They were re-continuing trade, which made both empires rich-out-of-their-minds. The Dwarfs were at their highest point, the Silver Age. It is in this period that the Dwarfs pretty much kicked Orc ass for SPORT and not for the sake of survival. They also had most of their ancient relics, and Karak-Eight-Peaks, the greatest Dwarf Fortress of all, still under their uncontested ownership. The Elves were somewhat dismayed at Malekith's dissension, but hey, they were rich as hell and powerful to boot with Malekith and his followers presumed fleeing or dead.

God Damnit, Caledor II

Then the Dark Elves, posing as High Elves, started to mercilessly rape Dwarven caravans. The Dwarf High-King at the time, Gotrek Starbreaker (a manly-ass Dwarf who could probably beat Khorne at arm-wrestling and make him look like a pansy in comparison, but wasn't known for his smarts) promptly got pissed and sent over diplomats to yell at the Phoenix King at the time, Caledor II (son of Phoenix King Caledor the Conqueror and a skilled warrior like his dad, but unlike his dad was a reckless, spoilt man-child). The first time Caledor told Gotrek to piss off for being rude and if he wanted anything, had to plead. Gotrek sent the diplomats back saying he wanted double recompense for the implied insult. Caledor II, upset with the boisterous diplomats, proceeded to shave them of their beards and hair (Hence why the Elves call it, "The War of the Beard") and send them back to Gotrek. To Dwarf-kind, this is the greatest crime one can commit. Gotrek Starbreaker, upon getting Caledor II's response, spent a year or so mustering the full, raw, uncut power of the Dwarven kingdom before launching a brutal attack on the Elven colonies in the Old World.

The Actual War of the Beard

The first siege of Tor Alessi began, in which the Dwarves were forced back (but not without wrecking half the city). Caledor II, pissed, marched on down to the Old World and slew Gotrek Starbreaker's son, Snorri Halfhand, in single combat.

After Halfhand died, the Dwarves got their act into gear, and began their rape-fest of the Elven colonies. At the battle of Oregor, the Elves were struck a serious blow by the Dwarves in a battle largely consisting of Manoeuvring. Yeah.

In said battle, Gotrek Starbreaker's nephew and new heir Morgrim marched his bum right through a giant army of elite Elven troops, took Imaldrik, the Prince of Ulthuan, and proceeded to use him as a dishtowel (though some source say Imaldrik surrendered, letting the Dwarfs kill him in exchange for sparing his troops). Dismayed, the rest of the depleted Elven forces ran for their lives. He then got the name "Elgidum" from said battle - which means Elfdoom. Awesome.

After that, the Elves got butthurt and decided to try and attack Karak Azul, where the Dwarf's best smiths resided. They almost won, too, due to superior numbers. But Dwarf miner Brok Stonefist, nicknamed "The Nightmare of the Deeps", rallied the forces of the Hold and kicked the Elves halfway across the Old World. The High Elves realized that this badass was a pretty big threat, so they sent one of their greatest tactical geniuses, Salendor, to combat him. They fought each other to many costly stalemates until they met each other inside an Elven Colony. The Dwarfs burnt the city to a crisp by accident, and both forces fled, excluding the two leaders of the armies. Locked in close combat, they killed each other in the middle of the burning city. Some say that in the ruins of the colony, their ghosts still fight, locked in eternal combat. But that's bullshit, since manly Dwarfs who die in combat pretty much always go to Dwarf Heaven, and dead elves either get taken by Elf Waystones, Slaanesh or the elf underworld.

By then, there had been a great number of sieges on Tor Alessi. Finally, the wall was pretty much completely obliterated, so the Dwarves piled in, slaughtering the Elves cowering within the city. Gotrek, carried upon his throne, found Caledor II trapped in a corner, unable to flee. They fought mano-e-mano for days upon days before Gotrek Starbreaker struck the Phoenix King Caledor II with a single blow from his hammer and after the Phoenix King pleaded for mercy, he killed him. He then stole his crown, telling the enemy "Nanana boo-boo, I'm better than you, stick your head in doo-doo" and burnt the city down, retreating to Karaz-A-Karak to flaunt his victory. The Elves, utterly demoralized, gathered all of their forces for one final suicidal push on Karaz-A-Karak before word came that the Dark Elves had attacked Ulthuan.

Aftermath

Since then, each faction has had burning hatred for each other. But each faction was made considerably weaker by the war, making them both prone to their fall-from-graces.

With the power of both the elves and dwarfs spent, it left a power vacuum that was rapidly filled up by the rising power of men (and the less nicer races like the beastmen and skaven). Bretonnian, the Empire and Kislev all in time rose up from the regions the elves had previously conquered.

The High Elves retreat completely from the old world and didn't return until much later, to find that all those weird smelly barbarians called humans had suddenly sprung up all over the place and making their own cities and nations to boot. To say the elves were surprised is an understatement.

The Dwarves nearly right after the war suffered a nasty series of earthquakes that wrecked their defences and left many of their holds and mines open to invasion from the skaven and night goblin tribes. The fall of the dwarf empire broke them into smaller kingdoms, now with each hold under near constant siege.

With the high elves retreating to their homeland, the few left behind becoming Wood Elves who rose to be a quiet power in Athel Loren. Alas they had no peace, being constantly attacked by any old goblin and beastmen walking into their forest.