That's actually literal title search. But I guess we can assume, if a game has dwarf or elf in the title, that creature probably will appear in the game.
But it does not catch most games that do not have it literally in the title or use a spelling too different.
Interestingly, there is no popular tag for elves or dwarves on Itch. Surprisingly Steam does have those, but I do not know how often they are used. I would not tag dwarves nor elves in a fantasy game. Dwarves have 380 games actually tagged with it. Elves only 170. And both of those include dlcs. And a game like Baldurs Gate that features Elves is not tagged Elves, nor Dwarves (but someone tagged a dlc for the game with both).