Goblins are a dying race. Having coalesced into a people in the deep forests of Europe, they were neighbors of the burgeoning elven society. Yet, it was not the elves who diminished their numbers and forced the forest dwellers underground. Elves considered goblins more as a younger cousin, a mischievous neighbor who, from time to time, needed a sound beating to remember his place. The goblin race didn't start its steady decline until it met humans.
Even from the times when humans inhabited Germania and Gaul in sets of tribes, men made war with goblins. While men and elves would eventually integrate, men and goblins were at constant odds. The dominance of Roman legions and culture did little to change this dynamic. While many 'barbarian' tribes were integrated into Roman society and its military, goblins remained on the fringe and always at odds. The eventual degradation of the Roman Empire was not enough to stem the slow tide of the goblin's decline. It was instead replaced by the zeal of conversion to Christianity which fell hard upon the pagan goblins. Conversions by the sword were typical; goblins would not give up their superstitious religious ways. Crusades through the Baltic regions finally succeeded in routing goblins out of their ancestral forests for good and forcing them to dwell underground to scratch out a living.
Today, goblins have long since lost their place among the great wilderness and are consigned to fringe areas outside of the Empire. Clinging to existence underground, various goblin tribes subsist on a combination of scavenging, limited agriculture, husbandry, and raiding. What few small congregations of goblins remain are typically found in the Polish-Lithuanian Commonwealth hiding among the decentralized country side regions and enjoying a small measure of tolerance. Small pockets are also found under the mountain ranges ringing Europe proper.