Sure they can. The problem with D&D is elves, and most of the other non-human races, have become to associate each race with a particular professions/class. Which seems to be what Wizards wants. But when you do your own campaign you can change the races.
I was looking through Unearthed Arcana at the book store and they had a set of desert versions of all the races. Desert elves herd cattle. Those are the cowboys. Desert Dwarves don’t have stonecutting as a skill, that’s practically sacrilegious. They specialize in drilling water wells. I’m already planning on have dwarves that specialize in drilling oil wells. Wildcatter dwarves.
It seems to me a very elven to be nomadic people concerned mostly with the horse and the hunt like the Indians of western Texas were. Are those barbarians?
So I’m going to have both. Right now I just discovered King Ranch in South Texas and plan on integrating it into the campaign and am trying to decide if I want it to be an elven kingdom or just a human one.
And I should point out I’m not looking at any one time period to build this fantastic Texas. King Ranch was well after the republic period, but its just too good to pass up a ranch that was bigger than Rhode Island.