Free Peoples

The Free Peoples are a reference to the dwarves, elves, gnomes, humans and orcs. The designation 'free' refers to their free will. While there are other self-conscious races in Aladron they are usually not included among the Free Peoples and the term the mortal races are used instead.

It has been suggested, although this is a latter construct, that the Free Peoples refer to those races which has thrown off the necessity of religion and embraced science. However, as this only happened in the late Age of Knowledge and the Age of Information and the term is much older than that it doesn't offer a very good explanation.

Source
As the term 'humanity' only include humans and not other people a new term was needed.