Talk:Halfling
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Q: Was there a specific reason (or several reason) for the exclusion of halflings from the Tower faction?
A: I wanted something more creative and more visually interesting than a halfling. For a replacement candidate, it was a toss up between Gremlins and Red Caps. Gremlins were more familiar, so they made the cut. When the Halflings were removed, there was always an intention to use one of the expansions as an opportunity to reinsert them as a neutral troop.
Greg Fulton, the lead designer of HoMM3 (RoE and AB)
Tavern of Might and Magic [1] Interview (2019.02.28)