In real life, a dwarf is a small or short person, whose growth has been stunted. In most cases this is caused by some genetic disorder, usually affecting bone development.
There are over 200 different possible diagnosis of dwarfism, but most dwarfs (about 70%) are Achondroplastic dwarfs. A person with achondroplasia will have a normal sized trunk with short arms and legs, and stubby fingers and toes. They may have a slightly enlarged head, and prominent foreheads. Although they have a fully developed trunk, they may also have some degree of spinal curvature.
Achondroplasia is caused by a mutation in a gene (fibroblast growth factor receptor gene 3) that helps limit cartilage growth, making it overactive. (Hence 'a-chondro', meaning 'without cartilage') A normal sized person will have two normal copies of FGFR3; an achondroplasic individual will have one normal copy and one mutant copy. If you have two mutant copies, you will be born dead. It can be passed on from parent to child, but most cases are caused by new mutations of the gene.
Growth-hormone deficiency, AKA Physiologic dwarfism or Pituitary dwarfism, is a form of stunted growth caused by a hormonal imbalance (namely, too little of the growth hormone somatotropin). This condition causes a person to be small all over; small trunk, small arms and legs. This is generally no longer considered a form of dwarfism, nor should one use the traditional term midget. As far as I can find the current PC terminology is 'person with a growth-hormone deficiency'.
Other comparatively common forms of dwarfism include Diastrophic dysplasia, Osteogenesis imperfecta (type III), Pseudoachondroplasia, and Spondyloepiphyseal dysplasia congenita.
Although people with various forms of dwarfism have a wide range of heights, the oft quoted 'official' definition of a dwarf is someone four feet ten inches or shorter, male or female.