[einhverfr]

You still have near-exact boundaries between culture and portrayal of the entities involved. If you are in Continental Europe in the 8th Century, these are demons or even Satan himself. If you are in Sweden at the same time, it's the dwarves and they are the best metalworkers in the 9 worlds. Folk religion in England at the time still talked about elfs being associated with this sort of thing, and folk religion in Ireland was different yet.

I don't think you can have regional stability and such variation between regions with that hypothesis. I think an anthropological one makes more sense.