In my setting, humans once lived in a hyper advanced magical technoscape deep underground, essentially hyperborea. There was a magical catastrophe in which they tried tapping another plane for infinite energy, and instead ended their civilization. A few (thousands) survivors tunneled their way to the surface, where the setting actually is.
This is relevant because after reaching the surface world, they lost much of their knowledge and power. After splintering into many tribes that went on to create the modern civilizations, one tribe, with the greatest retained knowledge, experimented again. In an attempt to reclaim what they lost, they were mutated by magic, becoming elves, long lived and inherently magical.
Their ear tips are like magical tuning forks, allowing them to sense leylines and such, giving them greater magical ability. They are so intertwined with the worlds magic that they can only reproduce on massive leyline crossings, which is where their cities are built, explaining why they are so rare, why they rarely leave, and why there are so few of them, as well as why you never see a baby elf outside of their cities. Wood elves traded a lot of their magical attunement for the natural in a pact with forest spirits, their ear tips and eyebrows have long hairs at the end which help them sense wind, air pressure, temperature, and even incoming weather. In regards to normal elves, when a member of their race is exiled from their city for whatever reason their ears are docked so that the power of elven magic does not fall into the wrong hands