More on my Camalynn setting - and now, on Dwarves. Dwarves build their vaults near underground rivers and/or geothermal vents. This brings a natural power source to the forge's massive bellows and mechanical hammers, as well as other machinery. Thermal vents usually also bring hot spring water for the bathhouse.
The forge is the vault's heart and its temple. The head craftpriest works the forge as part of his sacred duties - he is also the head smith in most cases.(edited)
They tend to be independent; dwarves in my setting once ruled over a kingdom, Muspelheim, which had both a dwarven and a human population. Most of Muspelheim is now the domain of beastmen; only a few independent vaults remain in the south of Muspelheim.
Once they did pay tribute to kings of Camalynn (a human kingdom). Now Camalynn has fallen into a collection of city-states itself, so the vaults are independent themselves
Dwarves worship the Mastersmith - the one Lawful god who forged the world out of stone and the dwarves from steel. Some rogue theologists claim that the Mastersmith and the (human Lawful god) Conquering Sun are one, but both the Churches and the dwarves deny this. The hammer is the Mastersmith's favored weapon, and favored tool.
Dwarves are the most technologically-advanced race of my setting. They have flintlock firearms while humans have matchlocks; they have all the cool mechanical technology inspired by real-world Song Dynasty China medieval tech (even an Alchemist's Fire double-piston flamethrower). And, of course, automatons. And some lost vaults are rumored to have even higher tech.(edited)
Automatons are the sole monopoly of the Machinist's Guild, which is Dwarven. They guard their technology jealously and enjoy legal protection in most human kingdoms and city-states. They also produce superb versions of technology known to Man, such as clocks and printing presses. A city's Dwarven Quarter, dominated by the Guild, is thus a technological wonder.