According to dictionary.com, swarthy means:
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Having a dark complexion or color.
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In other words, these swarthy men were darker skinned than those the narrator would be most familiar with. If this means they were darker in the manner of southern Italians or Arabs (darker than those of more Teutonic descent) or really and truly swarthy in the manner of Africans, who knows.
Certainly, no apparent connection to Dwarves.
Unless Dwarves were swarthy in skin tone...