The exact nature of dwarven settlements has been intentionally left vague. It depends on how you imagine the dwarves living.
1. Dwarves live in rock-cut dwellings in mountainous terrain. Their food comes from high-altitude terrace farms and mountain herds worked by the lowest class of dwarven society. The efficiency of their farming allows about 20% of their population to be urban. Urban dwarves dwell in subterranean cities and villages. Villages are essentially outgrowths of vaults, in the same way that hamlets are outgrowths of manors; while large cities are a series of underground citadels, each similar in size to an urban ward of a human city, all connected by underground highways in a hub and spoke around a central vault. Essentially, dwarves reverse the traditional human concept that the higher a man lives, the more powerful he is - whereas the human emperor lives on the palatine hill and the peasants in the lowlands, dwarven peasants live exposed to the elements high on the mountains, while the clan-lords live in the deep vaults. I imagine the dwarves on the northern slopes of the Meniri Mountains living in this manner.
2. Dwarven lords live in fortified vaults carved into hills and tors, similar to the way elf-mounds are often imagined, with hobbit-like settlements of common dwarves dotting the landscape around the central vault. In this view, there are not really any dwarven urban settlements; instead there is a big central vault, and then scattered independent dwarven homesteads where small crafters and herders dwell. I imagine the dwarves of the southern hilllands of Jutting Mountains living like this.
3. All dwarves live underground. Dwarven farming is either non-existent, or relies on magical mushrooms that thrive in the underdark. Dwarven cities are vast underground metros.I toy with this as perhaps being the original dwarven settlement pattern but I usually eschew magic food sources.
A side note: I assume the physiological differences between the various races impact where and how they live. Dwarves are stocky, short-limbed, and hairy because they are adapted to live in harsh, cold climates, endure heavy labor, and move through narrow underground tunnels. and so on. They probably eat a lot of meat and cheese.
Elves are lithe, gracile, hairless, and pale because they are adapted to living in dark forests. And the reason they live in forests is because mixed agro-foresty has an incredibly high yield for those patient enough to cultivate it; with their long lifespans, elves have the time horizon to do so. Elven forests aren't wild and untamed, they are rather enormous, carefully maintained gardens and orchards whose careful, decades-long yields can be easily disrupted by a foolish woodcutter or beastman arsonist. They eat a lot of fruit and vegetable with some meat.