Our most hated enemy, in the RMSS game I play, is an educated and sophisticated goblin. Not sure of his profession. Maybe an evil healer? We first heard of him from some prisoners. We've never actually fought him, or even encountered him up close. Here are some snippets from the game logs.
Balarc Pass (pg 19): After we are attacked by a goblin and another humanoid, we question them. "Their leader was at the tomb, and has orders to find out what we are doing here and to capture us. Their leader was a short figure, wearing round wire-rimmed glasses. The scout is motivated by a desire for status and ascension to the rank of Chosen. Their cause is to bring Bane the Destroyer to ascension, power, glory, and freedom, to punish unbelievers, and further the cause of some other leaders (a high cleric of Bane)."
Balarc Pass (pg 23): Brandi and Alexia recount that after their capture, "A four-foot tall creature in a dark grey cloak with small, round, wire-rim glasses revived them, laughing, by transferring their wounds from their bodies to the body of an orc, who promptly died."
We also experienced him scrying on us at one point.
Siege of Balamor (pg 27): "We are on the battlements with Hawkins when we see a 4 foot figure stepping out of a 200 foot high pillar of flame. Around him, a ring of about 50 taller figures, chanting. This is 700 feet away, just out of range of our ballistas and catapults. As we watch, arms emerge from the earth, skeletal arms that grab the people in the circle and drag them down, amidst screams. Hawkins tells us the short figure, a goblin, with the familiar small circular spectacles, is Elgin. Watching this, Hawkins says he has to leave, and vanishes magically."
This was the first appearance of undead in the game. Up until this point, they were considered storytale material.
Return to the Lighthouse (pg 73): "Listening to the orcs guarding the lighthouse, I learn that they were in the north, then somewhere hot (Nilth?), then back here. A whole month with no action, which is a long time for them. They clearly have travelled a lot, and been busy. They call Elgin 'Boss.' They also complain about having to scrub bones."
This group of orcs was a unit of heavy cavalry. They were well equipped (high steel, warhorses), trained, disciplined, and included a paladin and a sorcerer. (Orcs as part of an advanced and almost industrialized civilization is a major theme in the game, something that we only realized later on as the scope continued to increase. They were considered storytale material at the beginning of the campaign, too.) We ran into them several times and had to run away (although we killed a lot of their advance scouts). Given their level of discipline, it really weirded us out that Elgin was on a completely casual basis with them.
It also really weirded us out when we realized, much later in the campaign (pg 178 in our log) that the group of orcs we had just fought and defeated, was actually the same unit of heavy cavalry that had chased us around so many times. (No horses though, they snuck into the city and attacked us there.) It turns out that threats are different after you have advanced in enough levels, but that fear doesn't go away on its own!
In my own game, the main present enemies are corrupted dwarves who have been trying to steal a set of relics from the party's patron and his allies (the dwarves did obtain one, but the party has foiled their other two attempts). But the party is convinced that the real villain is their patron, who set them up to transport one of the relics in the first place! Not sure if they are serious or it's a running joke. Probably both.
As for whether they are right, obviously I'm not telling!
I haven't really had the chance to make a good dwarf villain yet. Gamunn Lanterneye was good for a few encounters. He was a stone knight (earth-based warrior mage). One of his eyes was replaced with an aetheric artifact (which glowed, thus the name). His most annoying trait was mental illusions that deceived enchanted (giant) insects into attacking the party. Since one party member was an insect priestess (basically), it was personally offensive and not just an attack. They first learned of him after an insect attack, when one of the surviving insects told them it had seen "glowing eye" and then they spotted him disappearing into a tunnel with the priestess's scrying spell (this particular spell gives a view of a large area from far above, but the priestess has a very keen eye, so she sees a lot). I hoped to get more mileage out of him but he failed to escape a critical battle...
The next guy up the chain is Brynh Arcscar (he has extensive electrical burns), an earth mage. He was all set to do a nice villainous monologue but after the party's archer critted his ally, he decided escaping alive was a higher priority. Maybe next time! He did pull off a nearly-successful assault, so they take him seriously, even though it's not really personal... yet.
Really good villains need to stick around for a while, so it's good if the players get the chance to see their handiwork long before they actually encounter them. If they do see them, a situation where a fight is impossible (maybe for diplomatic reasons, maybe just a sighting at a distance) helps drag things out. Once you actually get into a fight, aside from the chance of your villain dying, a lot of the fear of the unknown and abstract goes away, and now you are dealing with something that may be dangerous but without the mystery it's not the same. Still, even before that fight, they need to be believable as threats. But to be a great villain there also needs to be a personal connection. Maybe it's a character history thing (you killed my father; you are my father), maybe religious heresy, maybe they stole something of the players', but something that elevates them above all the other things to fight in the world, which are usually numerous.