Goblins are intelligent humanoid creatures that live in dark fortresses in the mountains. They are primarily interested in killing dwarves. They will siege any sufficiently populous or wealthy fortress, and frequently employ trolls in their armies to destroy doors and other buildings.
Occasionally, one or more goblin "snatchers" may arrive if you have children in your fortress. They are stealthy like kobolds. Detecting them is announced by "Snatcher! Protect the children!". They will attempt to kidnap any children they come across and carry a bag with them for this purpose. After a few attempts goblin master thieves will start showing up – besides being generally more competent, these can also evade traps. There is also a small chance of getting the goblin ruler with these thieves, if he is a thief himself. Toady stated in a RPPR interview that these children will be raised by the goblins and can eventually show up in future goblin armies.
Independent of this goblins will ambush your fortress, sending squads of different soldier types. Later, the sieges begin: your primary adversary in an invasion, goblin numbers increase every year once they start attacking, and eventually begin besieging your fortress more than once a year. Fortunately, they are not very bright, and will walk into traps by the hundreds. They may sometimes come riding beak dogs as cavalry.
Goblins carry somewhat valuable gear. They often wear giant cave spider silk clothing, iron armor, even steel armor (that can be melted down) and steel weapons. Crossbowmen will carry dwarf-usable bolts. Goblin clothing is considered "narrow" and dwarves cannot wear it, though it can be used as trade goods. Goblin bones and skulls are not particularly valuable, although - as with all bones and skulls - the bones can be crafted into bolts and the skulls crafted into totems.
Unlike other races, goblin "roads" are underground, and if you get in to one, unless you are ready, it can take a long walk to the other side, and you can not enter the travel map when walking one. Being underground, they do not show up on the mapVerify.
Living among them
Starting a fortress with a goblin stronghold in the local area is not for the faint of heart. If you take on this challenge, be careful in choosing a starting position; if your wagon starts inside the stronghold, your dwarves will probably come to a quick and bloody end. Reclaiming the resulting miasmal pit causes a bloodless eviction of the goblins and leaves one with a broad selection of odd items scattered throughout the now deserted towersv0.27.169.33g.
Because the goblin master thieves can avoid your traps, it's useful to chain a few war dogs at the entrance. Cage traps also seem to be more effective than other traps at catching those sneaking goblin masters.
If starting in a goblin fort you should definitely ditch your anvil. If you have a soil level you can probably get by bringing less food and less booze, thus allowing you to bring lots of dogs; a large enough pack of dogs should allow you to escape the goblin fort with few casualties, and start building your own army. The dogs will also provide you with a nice source of meat.
Goblin society has few laws. Slavery, assault, oath-breaking, and murder are all considered a personal matter between the parties involved. Additionally goblins view all forms of torture as acceptable (and fun).
Goblins do not possess the aptitude for growing, tending more towards fishing, hunting, and butchering livestock for their food sources. Fortunately for goblins their digestive systems can derive as much sustenance from bones as from the meat that came on it.