Etrandish annexation of Dwarven clans
The Etrandish annexation of Dwarven clans was the process of integrating the Dwarven Territories (currently the northernmost portions of the Etrand) into the Kingdom of Etrand. This even was considered spontaneous both by contemporary observers and future readers of history books, but in reality, it was the conclusion of a gradual process. The Dwarven Territories officially became a part of the Kingdom of Etrand in 270 AEKE.
Even before the establishment of the Kingdom of Etrand, there was some interest from the human side to expand at the expense of the Dwarves. Fathred's Confederation had an interest in expanding into the Dwarven Territories, but they only managed to conquer the Kingdom of Steelhelm - eventually, after the fall of Fathred's short-lived state, the kingdom was re-created, albeit under human rule.
This new Kingdom of Steelhelm was opposed on all sides - on the north by their Dwarven neighbours whom they massacred, on the south by rival human tribes. Hence it developed a rather isolationist stance, making no attempts to expand into Dwarven territory. Eventually, relations with the Dwarves warmed up and trade began, but still no attempts to expand. During Corlagon's Wars of Unification, the Kingdom of Steelhelm was annexed into the newly established Kingdom of Etrand, and the city wouldn't regain her former glory for a century and half.
Enroaching Etrandish influence
During the late Hengistid period, the somewhat-autonomous Margraviate of Steelhelm made forays into Dwarven territory, but rather than making permanent territorial gains, the results were more akin to establishing tributaries.
During the Early Tondbertid period, Etrand routinely interfered in Dwarven politics, largerly as a means to ensure that succession wars end quickly and that the newly elected kings are at least lukewarm towards Etrand. At the same time, Dwarven clans would often appeal to Etrandish aid to win wars against their rivals in exchange for tribute.
During the First Demonic Invasion, the Dwarves - despite their superior technology and warrior traditions - had difficulty replling the Demons, so they asked for Etrandish aid. The Etrandish agreed to help, and placed a pro-Etrandish Dwarven puppet governor to rule the whole region on behalf of the Etrandish. During the Second Demonic Invasion, the Etrandish troops were withdrawn, weakening the puppet-regime. In 270, the puppet-ruler died, causing a succession war - the Etrandish, led by Prince Cuthbert of Etrandish, pre-emptively invaded the territory to put an end to the succession war. The Dwarven clans were called to the negotiating table, and the terms under which their lands would be integrated into Etrand were formulated in the same year.
The Agreement of 270
Under the Agreement of 270, it was agreed that King Andrei I of Etrand would be crowned as the King of the Dwarves - a largerly symbolic gesture that only served to further cement the reality, that under the agreement, the Dwarven Territories would become an autonomous province of Etrand. This meant, that while they recognized Etrandish suzerainty, agreed to pay taxes to the King of Etrand and gave up most of their sovereignty to Etrand, they retained the right to have their own laws, practice their own religion, maintain their old clan structure (albeit no longer wage wars amongst each other), and potentially secede, in case they believed that the agreement was violated.
Not every Dwarven clan liked the idea. As soon as Etrandish troops were needed elsewhere - which happened just three years after signing the agreement, in 273, courtesy of the Long Raid and the Hulran invasion of Etrand - these clans launched a rebellion. Even though the pro-Etrandish clans were the dominant force at that time, Prince Cuthbert still needed to return to suppress this rebellion after the was done with Hulra, and he could only spare a small number of troops, given how much of the Etrandish army had to be tied down to occupy Hulra, which was renamed to Etrancoast.
In 275, King Andrei I of Etrand died, and initially, there was some confusion in regards to the succession of the title "King of the Dwarves" - despite the agreement that clearly stated that their land would become a province of Etrand - an autonomous province, but still a province - some Dwarves still didn't quite understand what the Etrandish system of succession meant, and assumed that the next King of the Dwarves would be decided in the old-fashion Dwarven way. To clear up any misunderstandings, the newly crowned Cuthbert had to travel to the north, and make it clear that from now on, the King of the Dwarves would always be the same person as the King of Etrand, and that the two titles would be as one for as long as the Dwarven Territories remained an Etrandish province.
During the Middle Tondbertid Golden Age, both Dwarves and Gnomes benefited a lot from being a part of Etrand. They were able to trade directly with Etrand's neighbours, they could migrate to the various Etrandish cities and build up their own financial institutions. They could also seek opportunities outside of Etrand's boundaries, especially in countries that Etrand had close relations with.
The Late Tondbertid Decadence resulted in the Dwarven Territories unofficially gaining even more autonomy than they previously did. Under the Etrandish authority that was disintegrating in all but name, clan wars made a comeback, and there was barely such a thing as a central authority. King Calder I of Etrand made a lot of moves to curb the autonomy of the Dwarves, and even went as far as to forbid public practice of their religion, but there was no organized rebellion against him - instead, there was a movement to restore the governorship of Ladislaus Londbert, the previous governor of the viceroy of the province who was deposed and imprisoned by Calder out of jealousy for his fame, reputation and adoration by the Dwarves.
Eventually, in the aftermath of the Etrandish Succession War of 718, Ladislaus Londbert became the new de facto ruler of Etrand, having been crowned king after marrying the queen. His first move was to restore all of the ancient privileges of the Dwarves, such as their autonomy and right to practice their religion.