One of the chief complaints WotC has received about Dungeons & Dragons, especially in recent years, is the monocultural display of races the system gives. Choosing your race in 5e gives you a number of benefits. Some of those benefits are clearly bloodline/genetic related things - like the elves lacking the need to sleep or Dwarves being a short/stout build that is resilient against poisons. Other things though, are very much cultural aspects - such as weapon, tool, skill, and language training.
The way the books talk about races is also very mono-cultural. Mountain Dwarves all fall into these broad brush strokes of personality types, expected training, views of other races, etc, etc. The same is true for the various types of elves, gnomes, dragonborn, and pretty much every other race with a couple key exceptions: humans and half-breeds (including tieflings and aasimar.)
Humans are allowed to be as culturally varied as we are in the real world. A human from the country will be different than a human from the city. A human from Waterdeep will have different aspects to their personality than a human from Baldur's Gate.
Half-X races on the other hand also have room for some cultural variation, but built around a theme of their being excluded or otherwise treated as social pariahs due to their mixed-race heritage. In some cases - like half-orcs - the strong implication they are the unwanted child of violence.
Why Is This A Problem?
The chief problem with mono-cultured races comes from the systemic racism in our own world. Humans are allowed to be varied so that shouldn't be a real problem, right? Well, no, not really. The Western European centric style of D&D means that "humans" in this case means primarily white people - however much better the art is getting at showing variety - who are allowed to be good or evil depending on their personal wants. While the 'other', the other races, are locked into alignments and alignment patterns along with broadstroke guidelines for how they will act.
All elves (the surface elves anyhow) are Neutral Good or Chaotic Good leaning, trained experts with sword and bow, live in artistic forest cities, are creatures of grace and beauty, speak eloquently, dress tastefully, and are the type of people who drink wine.
All dwarves (again, excluding the underdark) are Lawful Good or Lawful Neutral leaning orderly types. Stout and hearty, hard working, like to make things with their hands, like to drink, speak with gruff voices with stoic personalities, and they pound their ale when not drinking the harder stuff like whiskey.
You start to see the problem? If not, I just gave details on how you could expect every elf/dwarf to act/be down to their alcoholic drink of preference. Not a lot of room for individual personality or creative expression within those stout tropes.
Thing is, it gets even worse when you factor in that the more monstrous races - representing the old xenophobic fears of those from further away/less understood lands - are often coded around minority identities. Orcs in particular have a lot of Black, particularly African iconography, encoded into their racial presentation while simultaneously being presented as dumb (they get an intelligence negative modifier even in 5e), strong, and savage people. You can just watch Django Unchained to get one reference to those very traits being mass attributed to black people in US History.
Beyond the problems of racism - which I am not in a position to talk about - there is also a major academic issue with this...
Culture Builds on Shared Experience
Culture is built around shared experiences, both the challenges and the aides. This is why the broadstrokes of culture are very much regional. In areas like Europe there is "French Culture" and there is "Irish Culture" but within those cultures are subcultures. The culture of Paris is different from that of Nice. The culture of Dublin is different from that of Wicklow.
How big the region is will impact how different those subcultures are because the larger the area the more different the shared experiences are. In part because distance will change those experiences, and in part because distance will keep the reactions to those experiences from being shared.
In a fantasy universe the dwarves who lived in the frozen north would be very different than the dwarves who lived along a coast, and both would be different from the dwarves who lived in a more arid or desert like region. There would still be some similarities from how their natural biological tools gave them ways to deal with challenges, but there would be many differences as well in mannerisms, diction, forms of expression, sustenance, and even libations.
Cultures Mix When They Clash
On top of that, you have to remember that as cultures clash and come in contact with each other they mix. Yes, this is part of where Cultural Appropriation comes in, when a powerful group just takes something from a weaker group without respecting or understanding it. However, there are other things as well. Language comes from this and changes with this. Ways of life can change with this. And entirely new subcultures can form out of the clash as groups of what was once two different cultures grow to have more in common with each other than their respective 'home' groups.
You see this in the real world all the time. Drive far enough on any road and you can see how slight changes in cuisine and other aspects of culture shift. There is no jagged line in the U.S. where you go from being in 'the North' with the yanks to being in the South. There is a slow, messy transition where aspects of southern culture have reached up into more northern states, and as you go further and further you see more and more of it until the aspects of northern culture are no longer reaching. It is a bit harder now a days with how connected everyone is, but you can still see it.
Classic D&D Is Always An Old World
This blending of cultures that happens with contact and conflict is where the mono-cultured approach of D&D always feels weird to me. See, in a brand new D&D world where the gods just made their races, mono-culture could make sense. There is only one kingdom of Wood Elves, and they've never interacted with non-wood elves, or at least non-elves. Same for the dwarves, humans, etc, etc. They've never come in contact with anything but themselves, and so they would have their way of dealing with life and that would be that.
However, that is never the case with a D&D world. We are always ages and millennia and eons later. The races of the world have been in contact - and in some cases in conflict - with each other for generations of even the longest lived races. There should be a mix and blend of the races in every major population center. The cultural lines shouldn't be along race but along region with potential sub-cultures around race/class inside those regions as like groups with like.
So Do Mono-Cultured Races Ever Make Sense?
Honestly, I don't think they do. Not if you actually look into it. As I said above, there is the possibility in the newest of fantasy worlds but those mono-cultures would break down almost as soon as contact with other people were made, and even then you wouldn't have a "Wood Elf" culture, you'd have a culture that the wood elves of a particular area had, which would be different from those of a different area. The closer two races were to each other, the more similar they would be from facing similar challenges - with clashes and blending then happening on contact.
In a Sci Fi world where an entire world or region was represented by one unified government it could appear that way on the surface. Just how there is "American Culture" and "European Culture" depending on what side of the Atlantic you're on. But that is less than skin deep, and below that would be myriad sub-cultures and individual identities that defied and conformed to the idea of the mono-culture in various ways.
All Of Which Means?
All of this means that if you're building a world don't think about culture as a matter of race. Think about it as a matter of shared experiences. Those shared experiences are likely to be more region based than anything else. So consider that and how it works. And never be afraid to show counter-culture examples inside an area. It doesn't break the world. It adds depth to the people in it.