The origins of the Zapotec civilization, which flourished in southwest Mexico from 200 BC until the Spanish invasion in 1519, are shrouded in uncertainty, for even its earliest known remains are those of a culture already at a high level of urban and agricultural development. In art and architecture, mathematics and calendrical science, the Zapotecs have clear affinities with the earlier Olmec and Mayan civilizations to the south, but their history contains no record of migration from those or any other parts. Instead, and to the contrary, the Zapotecs believed themselves to be descended from trees, rocks, and jaguars.
The Zapotec capital was at Monte Alban, seven miles from the present-day city of Oaxaca. It lies at the top of an artificially leveled mountain promontory and is centered on a huge plaza, roughly 1,000 feet long and 650 feet wide, flanked on all sides by terraced steps, sunken courtyards, and low, handsome buildings. The first systematic excavation of the site began in 1931, and treasures of gold, jade, rock crystal, and turquoise were soon found in several of the tombs. But the most remarkable discovery was of something more mysterious than fine artwork and rich materials: a complex network of stone-lined tunnels, far too small to be used by adults or children of average stature.
The first of these tunnels, discovered in 1932 but not explored until 1933, was 20 inches high and 25 inches wide – so small that the excavators could make their way along it only on their backs. After they had inched through it in this way for 195 feet, they came to a skeleton, an incense burner, and funeral urns; there were also ornaments of jade, turquoise, and stone, and a few pearls. Some yards beyond this the tunnel was blocked, and to enter it again the explorers had to dig a 25-foot shaft from the surface beyond the blockage.
As they wormed along the net stretch, they found even smaller passages, no more than a foot high, branching off the main tunnel. Leading down into one of these was a tiny flight of steps. At a distance of 320 feet from the main entrance, the archaeologists found another skeleton, and a few yards beyond this, at the edge of the northern terrace of the great plaza, the tunnel came to an end.
Further excavations revealed two similar tunnels, both packed with clay. Finally, to the east of tomb number seven, where the richest treasures had been found, a complex network of miniature tunnels was discovered, all lined with stone and some of them less than a foot high. Smoke was blown into these in an effort to trace their course and “revealed a number of unexpected exits.”
The excavators’ initial guess that they had discovered a drainage system was abandoned. Also ruled out was the idea that the tunnels had been a network of emergency escape routes (or had been of any other service to humans of ordinary size), and official speculation about their purpose ceased. Since then, the pygmy tunnels of Monte Alban have remained one of the major mysteries of the unexplained.
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Alan's Mysterious World 
Perhaps the most spectacular and baffling find was in the later 1800s. Hundreds of tiny flint tools were found in the Pennine hills of east Lancashire, all of which were no larger than half an inch long. The tiny tools included scrapers, borers, and crescent shaped knives. The craftsmanship of such tools were extremely fine, and in many cases, a magnifying glass needed to be used to detect the evidence of flaking used to bring them to a sharp point. None of these tiny tools were practical for perfoming the tasks that the regular sized ones were intended for. Because of this, some speculated they were ritualistic replicas…but why, and why so small? Were these tools made by similarly small people?
As with the elf legends, tiny tools similar to the ones found in Lancashire have been found worldwide including Devon and Suffolk, England, Egypt, Africa, Australia, France, Italy, and India.