This is one of the races available for character creation in every game of the original series with the exception of Wizardry IV.
According to the Wizardry Archives Manual, gnomes are pious and agile. They live in underground caves, where they normally keep to their own kind. They are small, but sturdy. On top of that, their zest for learning makes them excellent priests.
In the Dark Savant Saga, they also possess a natural resistance against magic spells.
The Ultimate Wizardry Archives (Manual), p. 11 & 177.