You know you love them. I have a couple in my garden and even a Travelosity free gift from my mother in law. But, that's not who or what they were in Germanic traditions.
Gnomes are part of the earth element and as such, live subterranean lifestyles. Even their name most likely comes from genomos, “earth dweller”. They are considered the guards of the Mineral Kingdom.
They are small in stature and this makes them hard to see and even capture. It also leads people to believe they are superhuman. Humans thought to capture them because it was believed that they possessed the ability to see into the future. This is probably a later belief as some believe that the name gnome comes from the Greek gnosis which means “knowledge”. This has led many people see gnomes as old and wise.
Yet, the above terms are English and not the original Teutonic names for the gnome. In Germany, they are called Erdmanleins, except in the Alps where they are Heinzmannchens. In Norway, they go by the name, Nisse, Nissen in Swedish. The list of names goes on and on - you can view them all here.
Most people believe them to be a taciturn lot, but that is offset by the way they look. In many instances, gnomes are shown with pointy hats, large heads and beards. They add comical relief in many Fantasy novels/movies.
Be they funny, charming or taciturn, gnomes are an interesting race that deserve much more study.
Sources,
Gnomes
History of Garden Gnomes
Wikipedia