Goblins and Dwarves aren't the friendliest in relation to each other. Although The People tend to be a peace-loving folk, these two families of faries don't get along. It isn't that uncommon to find the two clashing sprites to be fighting in public areas.
Examples of this being on page 163 of Artemis Fowl (book), Mulch Diggums was placed in a cell (after being caught trying to sell stolen objects created by Mud Men to an undercover officer, Jules Rimet) with a group of "Psyched-up goblins." Needless to say, things went south from there. The ring-leader of the group notes that he has a bad past with dwarves, saying that his brother had been ambushed by a gang of them disguised as a dung heap.
On page 34 of the same book, it was mentioned that the Goblin/Dwarf turf war had came up again, and that without fail, everyday frustrated parents would demand the realse of their children, claiming that they were comepletely innocent. It's also noted that gang chants were cried and fireballs tossed around the tunnels.
One explanation of the general distrust between both groups is that Goblins can conjure fire, meanwhile Dwarves hate fire. They even dislike thinking about flames.