From BrWiki
Gnomes have never been considered as part of the Birthright Campaign Setting. While the word does occasionally appear in some of the original documentation, it is generally regarded as being an error. Indeed, gnomes are not expected to be found anywhere in Cerilia. As a result, player characters cannot be gnomes.
However, as always DMs are welcome to add gnomes as a secretive minor race that the parties may encounter in their own Birthright campaigns.
Approaches to the standard race have included total preclusion, treating gnomes as a Shadow World race, and as an extinct race which died at or after Deismaar.
See Also: D20 Gnomes