Is it a joke? Smurfs with the serial numbers filed off? There are plenty of joke monsters in the game and wouldn’t have been out of character for a man who pronounced his own campaign world Oerth with a Brooklyn accent (“Oith”).
I have read elsewhere online that the name is derived from Scandinavian folklore, but have been unable to confirm this.
I think I may have found a possible answer. It’s good enough for me. There was apparently a dwarf in Norse myth named Svíurr, Alternately named Sviárr or Síarr. Anglicized, this becomes Svir. The “f” may be a combining form? It means the vanishing one. Neblin, according to Wikipedia, is an alternate form of Nibelung. So, you end up with Svirfneblin.
I don’t know if Gygax went into this depth of analysis when creating them for his game, but it is an intriguing possibility. Especially, granted that one of their signature abilities is to vanish. Their grey complexion is an incredible camouflage in their environment.
(The above illustration is fair use. If I am mistaken, please let me know and I will remove it without hesitation.)
That’s all for now. Hope you’ll join me again soon.