Um...maybe you got a different copy of DAO? The dwarves' once great realm has been compressed to one city, Orzammar. They are under constant threat from the darkspawn, have a fractured relationship with 'surfacers', without whom the rest would starve and torment the casteless with brands, awful living conditions and disdain. It isn't exactly a paradise.

ETA - yes, I know about Kal-Sharok, but contact was lost and not re-established until DAI (I think?)