Halflings

I have put off this post for some time, for must admit I find halflings a mediocre addition to most fantasy games and can muster no excitement about them. Even in Tolkein's work from which the D&D halfling is derived from, their prosaic, domestic nature is in fact their defining quality. This is all well and good for a story with thematic purpose and authorial intent indicated to highlight the virtues of rustic civilians vs those consumed by power struggles, but in D&D games that message is rather hard to pull off outside of 'and then my character retired from the disgusting murderhobo life and lived happily ever after' which is a fine ending but a poor incentive for actually continuing campaigns.

They seem to be meant as a sort of 'underdog' character which I can understand the appeal of, but on the player-end of things, their impressive offensive and defensive bonuses spoil such notions for me, as they end up less underdog, more 'low-profile artillery platform/tank.' The idea is that to a halfling, humans and similarly sized foes would be like ogres, twice as tall and 8 times as heavy. But whereas ogres compared to humans have quadruple the HD and unarmed deal the same damage as a halberd, there's ludonarrative dissonance at play when that difference, one that we intuitively understand should be a nigh-insurmountable combat disadvantage, is represented in game by halflings merely suffering a strength capped at 17, max fighter level 6 or other such negligible differences that pay lip service to the notion that halflings face bigger, relatively speaking, perils.

AD&D Halflings

This is the monster statblock rather than the player bonuses, the player side of things being rather tamer in AD&D 1e but, in later editions and in various retroclones, prone to the defensive creep mentioned that turns them into short tanks. Tactically speaking, they may appear to be essentially goblins who cannot see in the dark, but are crack shots with the bow and sling. +3 to hit with their ranged weaponry is, for masses of soldiers, incredibly menacing, moreso even than Elves. They also resist magic, saving as 4 levels/HD higher, have a few uninteresting fighter/leader types of levels 2-4 based on # appearing, and have 1d4 dogs per halfling when encountered in lair. All in all, fighting halflings would be a numbers game that one would be unlikely to win, and they have treasure type B, which is likely to be no more than a few thousand GP worth of treasures and maybe some halfling-sized magic arms and armor on the leader types. Not at all worth the effort required to defeat, treasure wise, for most would-be pillagers.

There are also the Tallfellows, who are taller and get along with elves, and the Stouts, who are shorter, have infravision, and get along with dwarves. From this I conclude halflings are just shorter humans/elves/dwarves and not actually their own thing, and move on.

Sunset Realm Halflings, or Little People
They're just short humans, or if you take the halfling viewpoint, humans or 'hugemans' are just tall halflings. Most commonly found in the Beast Islands, they hold they are the original humans, and those humans who left small islands for the gigantic mainland grew larger as their habitat did, much like goldfish. Halfling, though not a slur, is a slightly rude term to refer to them as, a diminutive -ling suffix and assumption of deviance from a 'whole' norm. "Little people" is a generally acceptable term when referring to them as a group based on height rather than the actual culture they hail from.

Those who live in the moonlands are rumored to see in the dark, but in truth, those often dark lands simply encourage people to lean more heavily on senses beyond sight. Little clicks for makeshift echolocation, feeling air currents, smelling and hearing, and of course, simply letting ones eyes adjust rather than brandishing a torch can all contribute to this notion.

Due to their small size, they favor training beasts as guards and hunters, and are the origins of the 'Beast Battling' culture of the isles. They also are excellent sailors, mostly culturally but partly physically. After all, a 200 pound grown human requires more food than a 60 pound one, so their ships can be trimmed down and lighter weight compared to larger ships to take advantage of the winds and currents. Rowing is one aspect where they lose out to larger sailors, so most ships of levels larger than personal rowboats are entirely sail-reliant.

Islander customs of beast-befriending can be traced all the way back to the 2nd age, with children who had come of age being sent through rites of passage to claim a pet to serve as their friend and defender. As technology advanced, the war-torn 3rd age added a reputation as trap-makers, as it was easier to defend ones home with gravity, torsion, and so on than with force of arms. The technical skills required to build such devices also allowed one to identify and disarm them, and so 'security specialists' were often hired from the Beast Islands for all manner of legitimate and illegitimate ventures, making the trap-maker reputation shorthand for 'burglar.'  The 4th age saw them in conflict with the dwarves, desiring the  banned clockwork and gunpowder tech which cared not for the size of its wielder, and this gave the Beast Islands, already regarded as roguish, a further reputation for piracy, as dwarvish and Saresaren ships became prime targets of Beast Islander ships aiming to claim the unobtainable tech, and settling for whatever else was onboard. The calmer 5th age saw the rise of fine beast islander alchemists, as trade opened up and technology advanced further, and before the 6th age, the islands became known as the scientific hub of the world, surpassing the rationalist Saresarens and the stagnated dwarves.

On a less lore-heavy note
Rules for Halfling Players(Also children, goblins, ratfolk, and other ~1 meter tall beings)
HD per level never higher than 1d6
5-in-6 chance to hide, gain surprise, etc etc, compared to base 2-in-6, at least vs larger entities in larger environs. Not applicable in metal armor.
Saving throw bonuses based on whatever your system says, based on things missing you mostly
"Darkvision" is a more like a skill for moving without sight. Unless Goblin, they do see in the dark.
Weapons are 1d6 1-handed, or 1d8 2handed, and d10 weapons are too large (guns aside).
Though not explicit, it is assumed most entities find you less threatening due to size, which has its pros and cons