I would imagine they live same way the above ground people live. lol
There are people that have been known to live in underground tunnels. These are generally occupied by people who are homeless and who have no where to live.
They live under ground because its better to wiggle around and so they don't get eaten by birds,dogs,foxes, or even people 
Under Ground
Dwarves are subterranean people. They live under ground in hills or mountains.
under the ground
under the ground
No.
Sorry to break your heart but a blue fairy penguin does NOT live under ground...
Moles live in Holes! Under Ground
Idaho Ground Squirrels live under rocks and logs.
no !
They can live under ground