Best viewed as a sim dungeon, dwarven style. There's a campaign mode where dwarves seek to reclaim their land from evil magi, but it's pretty rudimentary (I like the Dwarves-Elves angle in the story though!). It does structure gameplay a bit on each level with preset elements and gives some bonus incentive to continue playing, however it's still rather sandboxy experience, in the end not differing all that much from actual "custom mode", which is pure sandbox without the preset storyline elements.
Otherwise, if you want to treat it as a strategy game (real time with pause), you're going to be dissapointed. It's as if creators were aiming to make something like Dungeon Keeper but in full 3D (multiple levels of dungeon not just one), changing the tone from dark lord to sort of supposedly benevolent dwarves, perhaps being inspired by Dwarf Fortress, but in the end they realized they won't make it and dialed down difficulty a lot. It's very basic, no AI to speak of, no challenge, you can do everything at your own pace without being forced to discover (always marked) rooms with enemies until you feel ready. No enemies respawn or surprise you unless you dig your own grave unprepared. Many things feel unbalanced and purely aesthetic in nature (although aesthetics do have gameplay implications of keeping dwarves happy - the more you dig, the more decorative stuff you need for dwarves to feel at home). Early game on a new level is rather slow in terms of trying to push story forward/discover random enemy rooms, because you are too weak. And then, after a bit of building up, you're totally overpowered. Especially once you realize your ability to move stuff anywhere you want by your godly player powers is overpowered on its own.
So yeah, as a sort of sandboxy doll house, err- dwarven dungeon, it can work pretty well. You dig around, gather resources, set up farm for food and wood (ultimate renewable resource that buys you everything), and possibly some shrooms for happiness (yeah.. but I usually just stick to wood for cash and get happiness otherwise :P), build some cozy place for your guys to live, occasionally fight baddies who won't be a problem at all after a bit of building up, push story forward. Can be somewhat slow, and there surely are better sim games, but the overall tone and setting here is pretty unique for such genre I think.
Doesn't work at all as a strategy game, though. And if you want to be picky, animations are bit off, but otherwise looks are sort of cute.
Bonus points for spelling "dwarves" properly (not "dwarfs"). Malus points for broken achievements (one mission is broken and doesn't give you full influence, required for cheevos).
Also take note there are silly in-game cosmetic microtransactions, but many are free and you can easily ignore the rest (of which only Ales DLC is separate on Steam and only gives you ale tree and kegs to increase dwarven happiness). Bigger DLC is Space Dwarves, which changes medieval tone to futuristic, but it only works in pure sandbox (aka custom) mode, not in the campaign mode. No idea about the Pets DLC.
In the end, this title isn't very strong overall, but I still recommend it for its setting, however only to people who like to mess around sandbox/dollhouse style and maybe have some TV series to watch at the same time for slower moments or something xD