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My recollections of some of Tolkien's thoughts on this matter include that he wrote his Elves in part as a reaction to, and corrective of, the way "elfs" were described in 19th century romantic literature, in which they were diminutive figures living in buttercups and such. He wanted Elves to be raised to their former high place in the literature, namely the Northern epics, such as the Elder and Lesser Eddas, I believe.
As such, Elves are not based upon a historic culture, but upon a mythical folk derived from northern myth.
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