During Session 5 of my Wilderlands campaign, the party encountered a house goblin. This particular house goblin was from the household of Lady Rixia, a manor holder to the west of Byrny. But what is a house goblin? Below, I present the explanation of house goblins for my Wilderlands campaign. As far as I know, this is not a concept native to the original setting, but it is obviously influenced by many real world myths about goblins with a dash of Gremlins thrown in.
Goblins were originally a gift to humans from the elves. Under certain conditions, elves are able to give birth to a true goblin. This goblin is immortal (in the sense of not getting old) and is bound, against its will, to serve the household in which it lives by doing various household chores. The magic that binds the goblins is highly conditional, and the household has to follow a fairly strict set of rules to avoid breaking it. While these rules are too numerous to completely detail here, they include avoiding things like allowing the goblin to see a free goblin, or allowing it to eat after midnight.
Should any of these rules be violated, the magic binding the goblin is broken, and it is free to go about its life as it pleases. As early human cultures, which had many house goblins, built up rules and prejudices against the presence of free goblins (to avoid the freeing of their own house goblins), the freed goblins usually escaped into the wilderness areas.
Humans long believed that house goblins could not reproduce, but this is not the case. House goblins reproduce like any other living being once freed. While the freed goblins retain their immortality, their children are born mortal and have fairly short lifespans (20-30 years) and can reproduce.
A shift in elven society led to the prohibition of producing house goblins about 2,000 years ago. As a result, the overwhelming majority of goblins encountered in the Wilderlands today were born free. Very few households still have house goblins, the overall anti-goblin sentiment in human society means they usually are only found in borderlands. This means that any house goblin encountered is an extremely ancient creature.
The freed goblin tribes remember, through oral history, the circumstances of their origins. When they raid human settlements, it is not only for the supplies possessed by the communities from which they are excluded, it is also in the hope of freeing remaining house goblins.