This question was directed towards the Village Heroes series – but it deserves a more general answer.
“Why are all of these characters human?”
The vast majority of RPG’s focus on humans – and most of the ones that don’t actually focus on humans focus on almost-humans with a few quirks or on humans with some common bit of fantasy layered on. There are very, very, few that focus on creatures that actually behave in inhuman ways and have genuinely alien cultures or technologies.
Why is that?
For the most part, it’s simple pragmatism. At least so far, the game designers and players are all human, and the vast majority come from industrialized, westernized, cultures. Humans are easy to relate to, their cultures don’t require a lot of explanation, and you can describe their reactions without tripping yourself up too often. If you need to check on their reaction time, average family size or some other detail, pick out some deities or cultural features, produce an old myth of theirs, or need some other odd factoid, there are entire libraries of information available.
Ergo, even if a game features other races, they almost always wind being portrayed as funny-looking humans with a few game-mechanical modifiers. They may be labeled elves, dwarves, or vulcans, or they may look like anthropomorphic deer – but as soon as you note that the locals are honorable, get thus-and-such a package of modifiers, and describe a vaguely samurai-styled culture, the players will all be on familiar ground, and the katanas will be flashing soon enough. For game purposes, that’s a good thing. Spending three sessions explaining your world simply doesn’t go over well.
Trying to create a genuinely non-human race and culture is a tremendous amount of work – and it’s awfully easy to trip yourself up. Even if you manage to get it all right on the fly when you’re called on for details on the spur of the moment, the player’s will never be able to remember all the details and keep it consistent. Even if they all start out as brilliant logicians with photographic memories, eventually the caffeine, sugar, and energy run down, people get fuzzy, and mistakes happen.
It’s easy to gloss it over when someone forgets their manners, or there’s an anachronism, or some such. It is, after all, a fictional universe and player characters are almost always eccentric – and usually enough to drive anyone a little crazy. The players are used to being human, and will rarely really foul up a human or near-human role.
Forgetting that your alien species dissolves in water and having a fight scene in a raging storm by the sea is going to be harder to cover up – especially when no one remembers that detail until after twenty minutes of action in that setting and they’ve used the water to short out the enemies electrical equipment. Suspension of disbelief goes right out the window when you abruptly find that the centaur archer has spent the last half an hour of the battle sniping at the pirates from the crows nest. All that takes is a few moments of distraction and a player who isn’t too familiar with the details of ships.
“What’s the highest place I can reach?”
“The Crow’s Nest.”
“All right, I’ll start sniping from there.”
Creating non-human races and exotic cultures can be great fun. For a deep-immersion game it can be immensely rewarding. For most other games, even if it isn’t at all what you intended, most of the exotic races are going to wind up being played as humans in funny hats.
But wait! There are entire, popular, games that revolve around non-human character types! Just look at most of the White Wolf lines!
Well… no, they don’t. Those characters are all pretty throughly human. That werewolf is tough, strong, and regenerative. He or she can shapeshift, probably commands a few magical tricks, and may even have a few exotic motivations – if, and only if, the players are paying any attention to such notions.
A mid-level 3.5 “human” Druid does all that and more, has experienced many different sets of animal instincts, and will often act a lot LESS like a normal human. When Werewolves get set on fire they try to put it out; they don’t calmly decide whether or not they have something better to do this round, or go for a casual stroll through a burning house because it’s “only normal fire” and only does 1d6 damage per round. Ignore six threatening opponents? Your druid very well may. Werewolves hardly ever do. Fly into an insane berserker rage? Pretty common with some players – while others will stay cool and calculating while a demon lord of hell is tossing their children into the depths of the abyss child by screaming and pleading child. Exotic motivations? Have you ever listened to players explaining why they had their characters do various things? Now THERE we have exotic motivations.
If you want a solid basis for your fantasy world, don’t go for your idea for a centipede-octopus race with bizarre lifestyle. Don’t even go with turtles and elephants. When it comes to a solid base for fantasy, it’s humans all the way down.