Races

Humans. They are a must have in this setting and you should consider going human only for this setting. Humans could be the inventors of steam-power or people who are adaptable enough to start to use new technology, but would be unlikely to embrace it as strongly as gnomes or dwarves might.

Dragonborn. 19th century people were fascinated by the newly discovered dinosaurs (formerly mythical dragons) and placing their bones as the centerpiece in a museum are a good Victorian fit. If you want to allow dragonborn, I might say they are descended from dinosaurs and were discovered in a lost world by “civilized” people on expedition. They could be tribal or be civilized and have their own alternative technology.

Halflings. Halflings might suffer as their peaceful country way of life is consumed by urbanization.

Tinker/Rock Gnomes: These little guys are the most steampunk ready of any race. In my world gnomes combine steam and magic to create mechanical wonders that sometimes explode.

Dwarves. They should be able to adapt to a steampunk style of doing things if it makes mining easier. Dwarves could act as the builders of a vast steampunk city above or even under the surface.

Warforged. Perhaps artificial lifeforms were created through magic or technology to fight as soldiers in a great war. These inorganic lifeforms are people just like everyone else, except they don’t need to eat or breathe.

Changlings. If you are going to run an espionage heavy campaign, a race with the ability to shape change can be an awesome addition.

Shifters (or Weretouched). If you want to bring in some gothic elements, then shifters could be a nice addition allowing PCs to hide a terrible secret that comes out in the moonlight (or at will).

Forest Gnomes and Elves. With such a high affinity for magic and love of nature it is hard to imagine them using steam as a power source. These people can be used to represent the steamless or even be opposed to technology.

Other races if you find any that you would like to add run it by me first and I'll see what we can do.