Although Gnomes possess the dwimmercraftiness to turn a thing into another thing, just as Kobolds do–unlike Kobolds, Gnomes never engage in this sort of business without good reason. Only under extreme circumstances would a Gnome completely warp the nature of a being, as the mere idea is considered base and nihilistic, two qualities that you will never find in a Gnome.
Gnomes have been known to transmogrify themselves, however, to blend in with their surroundings and go unseen. Take the case of B. Bingle Smuddersworth, who once turned himself into the very log that the Bugbear King Skrump was sitting on as he surveyed his battle map and formed a plan of attack during the Battle of Sprocklepotch Glen. With the fruits of his espionage, Smuddersworth’s Gnomish Dragoons outflanked Skrump’s forces, turning the tide of the war. Needless to say Smudderworth went down in history as one of the heroes of his age.
While few Gnomes are able to transform into living, sentient, creatures like birds and squirrels and other small animals, most are capable of morphing into inanimate life for short periods: such as logs, vegetables, or small shrubs. This ability has been misconstrued by knaves and rapscallions who fear Gnomes. Kobolds, Boggles, Boggarts, Bugbears, and Imps, impulsive and impetuous as they are, all believe that since Gnomes wield such great power that they would lack discretion in its use and turn it upon any transgressor.