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Wow, this idea is really taking off. I'll post the poorly-organized text from the txt file I've been using as my note-seed.
I dislike the 'barking dog-demons' interpretation of Kobolds in Second edition and the 'draconic repto-goblins' of the 3.x systems.
I fluff them as advanced Pangolins. Hard-scaled mammals with acidic stink-glands similar to a skunk and powerful burrowing claws. Good at climbing and digging. Rudimentary agricultural society, mostly tribal, but with a keen eye towards defensive fortifications. They drag their knuckles when they walk, but possess very hard claws (natural attacks).
They inhabit temperate zones. They're mound-builders. Their burrowing lends them towards fortified villages, usually surrounded by an earthen bulwark and topped with a palisade. Their religion (that I've created for them) is a crude system of ancestor and spirit worship with no true 'gods' per se. They get extremely offended if any of their ancestral burial grounds are disturbed in any way. Agriculturally, they're mostly foragers, but many have taken to cultivating small bug-farms (they are small sized, and like their unevolved kin, they get a great deal of protein from eating insects) inside sealed underground burrows. Tool use is minimal, since their claws serve as tools and weapons. they have no melee weapons besides claws, but they've developed crude throwing axes for ranged combat. They carve wood easily with their claws, especially when hollowing out a log to use as a canoe. They have yet to master domesticating animals on a large scale. Isolationist, they rarely raid unless provoked, though hunting parties will harass anyone trespassing at a grave site.