The Warforged are a race of metallic humanoids created by the Dwarves (specifically, Matham). They were sold by the Dwarves to the Harbingers of Purity during the Harbinger Coup, and used in the Battle of Broumov to battle back loyalist forces.
Matham, a Dwarven inventor, got the idea for the Warforged at a very young age. He dedicated most of his life to creating them. Finally, he succeeded. His creation did not bear the name Warforged and, indeed, Matham never intended for them to be used as soldiers; his idea was to use them as miners in areas too dangerous for Dwarves to go, as servants, etc. However, with the unrest in Stin Cepel after the Harbinger Coup, Matham's cousin Hilmer convinced him to weaponize his creations for the defense of the Dwarven Nations.
Unfortunately for Matham, Hilmer had manipulated him. The Dwarves agreed to sell the Warforged to the Harbingers of Purity for a pretty penny, which Hilmer profited immensely from. When Matham found out about this, he brought his complaints to the leaders of the Three Clans and demanded they rescind the sale. For his moral stand, he was exiled from the Dwarven Nations.
Meanwhile, the Warforged proved to be hearty warriors, and killed many at the Battle of Broumov.
After the Harbingers had been defeated, the Dwarves ceased production of Warforged. There was no market for them, as trade had been cut off with essentially the entire Central Continent. As a part of Queen Vyra agreeing to open up trade, all Warforged were decommissioned and the Dwarves agreed to never manufacture them again.
The Warforged were not designed with sentience of their own. They were metal warriors, nothing more. During production, some Dwarves reported strange behavior in some of the models, but this investigation was never followed up on.