The world of Skyrim is populated with a diverse range of races, from the more humanoid Nords and Redguards to the beast-like Khajiit and Argonians. However, the society presented in Skyrim isn't entirely free of prejudice. In fact, the game makes its population's struggle with racism a prominent topic throughout the entire game. Even the Dragonborn themselves is at times subjected to discrimination based on which race players chose during the character creation segment of Skyrim, with many NPCs responding differently to the player character based on the fact that they may be an Elf or Khajiit. That isn't the only way that racism manifests throughout the game, though.
The racial tension within the region is in part heightened by Skyrim's ongoing civil war and the Thalmor's influence over the Empire. Between the Thalmor's presence in Skyrim, the ban on Talos worship, and the actions of Stormcloak leader Ulfric, the entire region was under a great deal of both internal and external pressure even before the return of the dragons came along to threaten the population's way of life. With so many changes snowballing into one another at once, it's likely that the appearance of further conflicts among Skyrim's already-divided population came along as a result. The Nordic population feeling that their standard way of living is threatened could have led to the demonization of any perceived 'other.'
Skyrim is by no means the first game in The Elder Scrolls series to feature racism as an underlying part of Tamriel's society. In Morrowind, players could regularly come across enslaved Khajiit and Argonians working for the Dark Elves. Many NPCs in Oblivion would display casual instances of racism in their dialogue, such as Dar Jee the Argonian, a character from the Thieves Guild who will often make offensive jokes regarding the Khajiit. The problem is much more widespread and prominent in Skyrim, though, likely because of the fact that Skyrim's civil war is so central to the main plotline of the game.
Elder Scrolls: How Racism Against Elves Manifests In Skyrim
One could perhaps argue that the Nordic prejudice toward Elves in Skyrim is a direct result of the Elven supremacist views held by members of the Thalmor. The members of this branch of the Aldmeri Dominion seek to not only unify Tamriel under one governing body but also ensure that all positions of power are held by Elves. Thalmor NPCs regularly regard Nords as filthy and doomed to extinction. It's little surprise, then, that the Nordic rebuttal to this manifests in the often-heard claim that "Skyrim belongs to the Nords." The Stormcloaks, in particular, seek to oust outside influence from holding power over Skyrim and othering the human population of the region. In doing so, however, they also target the general Elven residents of Skyrim, many of whom have been around just as long if not longer than some Nords in the game. In fact, the Snow Elves made up most of Skyrim's original population, to begin with.
One of the most prominent examples of racism toward Elves in Skyrim appears when players journey to Windhelm for the first time, the seat of power for Ulfric and the Stormcloaks. Rolff Stone-Fist stands just through the city gates, accusing Dunmer Suvaris Atheron of being an Imperial spy. According to Suvaris, Rolff wanders around the Gray Quarter - home of most of the city's Dunmer population - every night hurling insults and even threatening to imprison and interrogate them. In his view, the Dunmer are siding with the Thalmor by not picking a side, and all of the Elves in Skyrim must be working together against the Stormcloaks.
If the Dragonborn is a Dunmer, Rolff will similarly harass the player, telling them flat-out that "their kind" isn't welcome in the city and taunting them over the color of their skin. A Bosmer Dragonborn is likewise berated by various enemies throughout the game, being told frequently that they should have stayed in the relatively unexplored forests of Elder Scrolls' Valenwood. Although Dunmer make up a significant portion of Skyrim's total population, especially considering the number of refugees fleeing Morrowind, it doesn't stop many Nords from viewing them as unwelcome outsiders. On the flip side, the Dunmer living on Solstheim in the Dragonborn DLC are likewise opposed to foreign visitors, calling them "outlanders" on more than one occasion. Orsimer are much the same, going so far as to react with hostility toward outsiders that approach their strongholds.
Skyrim Demonstrates Racism Toward Khajiit & Argonians
The Elven races aren't the only ones that face prejudice in the land of Skyrim. Khajiit and Argonians struggle just as badly. Khajiit are objectively the rarest race encountered in Skyrim and can be found almost exclusively in the caravans that camp outside of cities. Ysolda, an NPC located in Whiterun, outright confirms that many Khajiit face financial struggles because of negative public perception. This makes many of them turn to petty crime and thievery in order to make a living, which in turn fuels the idea that all Khajiit are untrustworthy thieves. A Khajiit Dragonborn will likewise face quite a few insults from the more humanoid NPCs of Skyrim.
Argonians, the only other beast-like race out of Skyrim's ten playable races, aren't much better off. In Windhelm, the Argonian population is entirely segregated from the rest of the city, being forced to live in the Argonian Assemblage at the docks. While this isn't quite as much of a problem in most of Skyrim's other cities, such as Riften, the home of Skyrim's Thieves Guild, where many Argonians hold successful careers working in inns or fisheries, it's indicative of how little the Nords of Skyrim trust refugees, particularly those of other races. It's a widely-held belief that Skyrim should be inhabited only by Nords and that everyone else is a threat to the stability and economy of the region.
The narrative in Skyrim doesn't shy away from the racism problem that plagues the region. In fact, it's almost impossible for players to get through the whole of the game without encountering many lines of dialogue explicitly highlighting the prejudices found among Skyrim's various races. Even some of the most likable NPCs in the game, such as Lydia, express views from time to time that only help to further paint the picture of the divide festering within Skyrim. This divide is a major part of the game's overall storyline, and will likely play a big role in The Elder Scrolls 6 as the conflict between the Elven-lead Aldmeri Dominion and the races of man comes to a head. It's just another large part of what makes the diverse continent of Tamriel feel so real despite all of the fantasy elements contained within the series.