Generally, "midget" refers to a person who is very short, but normally proportioned. "Dwarf" refers to a person with one of several varieties of a specific genetic condition called dwarfism - usually they have very short arms and legs and unusually large heads. Socially, I believe that the word "dwarf" is acceptable because it refers to a specific medial condition, but I think the word "midget" is considered offensive by some people who prefer to be called "little people" or "people of short stature.

"Midget" was a medical term referring to an extremely short but normally-proportioned person (e.g., with growth hormone deficiency), and was used in contrast to "dwarf", which denoted disproportionate shortness. Like many other older medical terms, as it became part of popular language, it was usually used in a pejorative sense. When applied to a person who is extremely short, midget is now considered derogatory. The word "dwarf" has generally replaced midget even for proportionally short people, and the term "little person" is also sometimes used. According to the Little People Organisation, dwarfism is "a medical or genetic condition that usually results in an adult height of 4'10" (147 cm)[1] or shorter, among both men and women, although in some cases a person with a dwarf condition may be slightly taller than that.