actually, dwarves disappeared because of their own fault... it's something related to the Aedric artifact Heart of Lorkhan.
the dwarves tried to do something with it and did not end well
They were attempting to create their own god using Lorkhan's heart. As you can see - it worked really well.
I did not even know that because the only elder scrolls game I played was that fifth, skyrim.
Read the wiki page here to learn about the Dwemer.
^This :)