A fantasy version of the Klan, where it's "Grand Wizard" really is a mage, and a dangerous one at that. Instead of hating blacks most of all, they hate non humans most of all (although they are no friends of black people either and certainly don't let them join.)
Historicly, we have had plenty of rl groups like the Taliban and the Puritans who supressed anything which was in any way fun. What if there was some group that was the opposite? (which in time would cause problems of it's own for the civilians under their control.)
A demagogue imimates the warrior-king or military officer of a long past age-his followers have the uniforms and weapons of that past time and are a dangerous group.
One day a year is the Day of Turning where those on the bottom of the heap for the rest of the year get to live like Kings. Privates question Generals, the people get a say in running things and there is great merriment and gift giving.
It is dreadfully rude to carry a fishknife whilst talking to a Merman or Mermaid, as they think of them as we would think of thumbscrews or other torture devices.
You've probebly heard of the real Thomas Hopkins, Witchfinder-General, who hunted down and hanged suspected "witches". What if there was a world/realm where magic was normal, and it was the non-witches and non-wizards who were hunted down and hanged as inferior beings?
THE GNOMES OF UDNALOR: Part I
Upon entering the deep underrealm of Udnalor, one must first pass through the upper halls, which were the residences of the gnomes in days of past glories. Now they have abandoned the fading tapestries to the worms and moles, and an uncanny silence reigns, laid over the oaken tables like the thick layers of dust and humus.
There may be creatures which now inhabit these areas: nests livid with giant maggots, rats and other vermin.
The watchtowers and passageways which lead to the Overground are frequently trodden, however. After all it takes a great many small humanoids to hoist a single giant rabbit corpse back through the fathoms of earth.
The gnomes primarily hunt giant rabbits with bows and arrows tipped with the subterranean poisons concocted by their best alchemists.