Wizards has an article where they talk about how they differentiate the goblinoid races - the goblin, hobgoblin, and bugbear. I think those creatures are actually reasonably well differentiated, compared to some humanoid races. You know what races really need differentiation? Goblins and kobolds. They both fill the same role:
Now, how are goblins and kobolds different?
I decided that, in my game, I needed to add some flavor to make goblins and kobolds distinct from each other. I started with the goblin. Here's what I decided to add:
Goblins are producers.
Goblins aren't scavengers. If all the other intelligent races disappeared, goblins would like that just fine. In fact, they may be trying to hasten that end. Goblins are sort of like dwarves: left to their own devices, they mine and hoard money. Like dwarves, they make food by some obscure process that may involve rats or mushroom farms.
Goblins have twisted treasure.
I like the idea that goblins are just as avid miners and crafters as dwarves. There's fantasy traction for that idea, from Warcraft to Harry Potter. However, it's weird if a level-1 monster has oodles of treasure. So I thought that, maybe, goblin treasure comes with a price.
More so than the other humanoid races, I decided, goblins are fairy creatures. They are masters of trickery and illusion. 2/3 of the coins and gems in a goblin horde are worthless or dangerous: not actually treasure but poison beetles, shards of glass, rat skulls. The treasure changes when exposed to sunlight. (You can cheat people in midnight transactions with stolen goblin gold.)
Furthermore, goblins make artistic, but hideous, magic items, mostly weapons. Goblin magic weapons and armor are covered with horrifying but well-rendered details. Every goblin tribe has a handful of warriors armed with +1 magic items. In fact, goblin weapons might be the most common type of magic item in the world.
Goblin magic weapons are worth far less than other types, though, because goblin magic is powered by pain, sacrifice, and hate. Every +1 item confers on its owner a minor curse. Here are some typical goblin magic items:
1) Biting Mace: The goblin champion who fights with this weapon never retreats and never takes prisoners. There's a toothy mouth on the side of this +1 mace, and another one on the handle. If you roll a natural 20 with an attack, it bites your enemy, doing 1d6 automatic damage per round until the enemy escapes. However, if you stop fighting or drop the mace while any foes live (including prisoners), it bites your hand for 1d6 per round until you escape.
2) Club Foot Truncheon: Goblins are the only creatures who make magic clubs. This one, like most goblin weapons, was made as a cruel joke. Anyone who carries this +1 club walks with a distinctive limp, taking a penalty to speed of 10 feet per turn. The limp is also painful, although this has no game effect.
3) Corruption Sword: These weapons are often wielded by misshapen, giant goblins with inflated Strength scores. A corruption sword is a short sword +1 with jagged, acid-chewed edges. Every time you score a critical hit, you do 2d12 extra acid damage. However, at the same time, one of your arms or legs becomes grossly oversized and muscular. For each oversized limb, you gain a +1 bonus to Strength and a -1 to Dexterity and Intelligence. If all four of your limbs are affected, you gain one of the forms of insanity from the 1e Dungeon Masters Guide. All symptoms are cured after a Remove Curse or six months without scoring a critical hit with this weapon.
4) Mocker Shield: The champion who wears this shield can always be located by following the sounds of hideous, hysterical laughter. Whenever this +1 shield's wearer doesn't make an attack during a combat round, a jeering, laughing caricature of the wearer's face appears on the shield on the next round. Instead of attacking the wearer, enemies can attack the caricature. To hit it, they must roll 6 on 1d6. On a hit, the wearer takes double damage from the attack - and the caricature laughs and laughs.
Goblins have their own leaders.
Although goblins are occasionally enslaved and made to serve as foot soldiers, that's a role more often taken by kobolds or orcs. Goblin tribes are usually self-governing and have the following leaders:
Goblin King: The biggest and toughest goblin, the goblin king, is nearly always armed with a magical goblin weapon. He's usually about as tough as a third level fighter.
Goblin Nobles: The goblin king is usually surrounded by big goblin champions, who are as tough as second level fighters, and often magically armed as well. Alternately, you can use hobgoblins for goblin champions, if your campaign world doesn't have place for a separate goblinoid Roman Empire race.
The hobgoblins-as-nobles scenario makes goblins into a feudal race, parallel to medieval human civilizations, with a pretty good spread of combat ability to provide increasingly difficult fights as the PCs venture deeper into the goblin lair.
Goblin Smith: The goblin smith's works in gold, silver, and iron are as detailed and skillful as those of any dwarf, but are horrifyingly ugly. Goblins value the work of their smith. They usually cripple him so he can't leave the tribe.
Goblin Shaman: As wizard magic requires study and discipline, the magic of the goblin shaman is powered by pain and death. The health and lives of captives and weak goblins are spent to fuel goblin spells. The goblin shaman has illusion spells to disguise traps and to create goblin gold, and enchantment spells that endow a goblin smith's weapons with their cursed magic.
Goblin Rabble: The rest of the goblin tribe are considered expendable by the goblin nobles - especially those who have been crippled by goblin shaman magic.
Soon I'll write up the changes I made to kobolds.