Abatwa1 is an interesting word. It refers both to African myths of a fairy-type being living in Southern Africa, and also to the Twa people as a group.
It is believed that the term originally referred to the Twa/San/!kung peoples that were the aboriginals of Southern Africa. You may also recognize the (politically incorrect) terms bushmen, Bosjesmans, pygmies or Hottentot; all of these terms refer to the tribes of nomadic hunter gatherers who speak some branch of the Khoisan language group, are quite short, and are light-skinned2. Abatwa is sometimes translated as 'dwarf'.
And, abatwa is sometimes translated as 'fairy'. It is unclear how accurate this translation is. In fact, it is most likely that this is wishful thinking on the part of Westerners. There is no good source for this myth. It is most likely that an eager ethnographer was a little bit too loose in his research methodology, and confabulated the real dwarves with the imaginary ones.
And there are no shortage of magical dwarves in Southern African mythology. In the Congo the Mongo tribes have a myth of Eloko, evil dwarf-spirits that hide in the forest and eat human flesh. This too might be based, very loosely, on the Twa people, and also appears in some Bantu myths. Other dwarves appear in other tribes; for example, there are the eimu spoken about by the Akamba, the utuchekulu by the Balamba, the uthikoloshe by the Xhosa, and the Tokoloshe or Tikoloshe by the Zulu. These are all recognized as being species of monsters, and not actually members of the Twa tribes. These terms are variously translated as 'goblin', 'demon', 'dwarf', and 'evil spirit'. Given the plethora of terms, it is easy to see how a non-native-speaker might have confused the terms for 'evil dwarf' with 'dwarfish people'.
Be that as it may, the abatwa have entered into American/European mythology as evil African fairies, and that is as valid a myth as any other.
1. Also Abathwa or Batwa in various branches of the Bantu Language Family.
2. Light skinned, in this case, means a yellow-golden hue, but still what Americans would consider 'black'. However, compared to the Bantu people, who are pitch black (and tall), the difference is quit striking.