The Grey dwarves make their home in the Underdark and are far more likely to be found amongst the Drow. They are, elementally speaking, near identical to their surface counterparts and many even follow the same Ancestors, however there are still many differences between the two races.
The lives and habits of the duergar
Despite what you'd think, duergar and surface dwarves have much in common more than do drow and surface elves but less than svirfneblin and surface gnomes. This is partially because the duergar lifestyle is not as radically different from surface dwarven life as drow is from other elves, the basic dwarven nature both races share dictates many similarities.
The physical differences between dwarf and duergar however, are easily spotted. The duergar, is pale, with a distinct gray undertone to its skin (unlike the ruddy hill or mountain dwarf), leading to the nickname 'gray dwarf'. This lack of colouration is the result of untold centuries spent far from the light of the sun, in greater isolation than their better-known cousins experience.
The relative emaciation of duergar results from the relative lack of food in the underworld and the quality of what food they do eat, consisting of subterranean beasts and fungi. Then, too, the hostile environment of the Underdark does not allow a fat, slow, clumsy duergar to survive for long.
Ages of living under these conditions have made duergar tougher in stamina than their surface cousins.
The psychological differences between dwarves and duergar are considerable. Accustomed to lives of hardship and deprivation, duergar scorn the values of surface races and of other dwarves. They are believers in the absolute control of all resources to benefit themselves, at whatever cost to other races and beings. They thus have a penchant for slave labour and mount many raids to secure more slaves
In these raids, any beings not currently allied with the duergar are fair game, and resistance is overcome with skill and fury.
The fate of these slaves is not enviable; any duergar slave-owner will treat rebellious and useless slaves with utter ruthlessness. Indeed, there are those who say that duergar have more in common with orcs than with other dwarves. Similarities between dwarves and duergar, however, are so widespread that former duergar slaves generally find themselves quite uncomfortable among surface dwarves. Under circumstances where dwarves and duergar must get along, as when they are both slaves of some other race, they generally find that they have much more in common with each other than with non-dwarven fellow slaves, and cooperation between them, however forced and temporary, is remarkably smooth and effective.
One cultural trait shared by duergar and dwarf is their attitude toward the beard, though this is not universally shared by all duergar. To those who care, the beard is a symbol of status and a source of pride. Cutting or shaving the beard is a mark of great shame, while burning the beard off with a coal or candle is reserved for those who have utterly disgraced themselves or their clan. As do surface dwarves, duergar plait their beards and braid them, using dull-coloured strips of leather to indicate status and profession. These decorations follow a system, but the systems differ enough that a duergar and surface dwarf cannot "read" each others. beards, except in the vaguest way. The closest analogy to this is the widely varying systems of indicating rank and status used by human armies; most soldiers can tell an officer from an enlisted man in an unfamiliar army, but finer distinctions are difficult to make.
As noted, not all duergar share this pride in the beard: Those who do not are often regarded as uncivilized and the least worthy of favourable attention i.e., other duergar clans will raid those "prideless" clans without hesitation.
Another similarity between surface dwarves and duergar concerns an appreciation for craftsmanship, Duergar raftsmen make many of the finest tools, armour, and weapons available to the underground races and take great pride in them. Even the dark elves and deep gnomes, no mean craftsmen in their own rights, admire the duergar's solid, unadorned, but highly effective creations: As is the case with surface dwarves, many duergar are so immersed in their crafts that they have no desire to marry. However, duergar are almost exclusively concerned with craftwork of a hard, practical, military nature, involving the construction of fortifications and the smithing of weapons, armor, traps, and the like. Artistic endeavours are rarely practiced and tend to be crude, though even these have a peculiar, harsh strength in artistic terms.