The Aifons were a race of people who were once like men but gained the ability to breathe underwater due to their close interaction with their patron god, Danalin. They looked like humans except that they had webbed hands and feet and perhaps even gills. They did trade openly with Patria so it's very likely there were at least a few half human half Aifon children running around. Its not even unthinkable that some Aifons would have decided to live in the human cities though this would have been pretty rare (like an elf deciding to go live in a human city).
There were no other significant Aifon settlements other than the island chain that they inhabited, and assuming that their bloodline was spread it would be pretty diluted through all the centuries that have occured since then, especially considering the impact fo the Age of Ice on everyone.
They mysteriously became extinct during the Age of Magic. Even Danalin and his angels have no idea what happened to the Aifons. There was a prophecy of destruction, a sense of forboding and a coming darkness that went on for years. Strange events were becoming more frequent, animals that lived in peace with the Aifons turned violent, animals born with deformities, nightmares among the most spiritual.
It was so prevelant that their most promising young man was sent to sequester help. To find out something about the omens. What he found was all bad, without exception every prophet fortold his death and the death of his people. Some told of even worse than death, of eternal loss. Some just fell to tears when they tried to augar his future.
Trenton never did find out exactly what could cause such destruction, but he did find a way to stop it. A ritual that would allow Danalin himself to enter creation.
The quest for it was a long one and Trenton met and learned a lot about the godswar, the compact and the Godslayer. He talked to Branding about the role of the gods, and priests of most of the good and neutral religions. In the end he stood upon the island home of his people the day before their prophecied doom and considered his options. His friends were around him, the ritual was in hand and he had everything he needed to perform it. But he decided not to do it.
Maybe Trenton didn't believe that the threat was real. Maybe he though it was just a trick to restart the godswar. Or maybe he knew that even though what he did might save his people, it would eventually destroy many more.
The next day there was a sudden flood of irrational cries and prayers from the Aifons, then nothing. No souls passed into Danalin's vault, none passed into Arawn's underworld. They were simply gone.
The islands themselves are uninhabited now, though there is evidence people lived there (both above and below the water) the entire area is tainted with the same influence the Aifons had noticed up until the attack. But there was nothing left of any of the people, Trenton or his companions.
The only thing of real value that was discovered afterwards was the ritual itself, which was later used to summon Mulcarn and start the Age of Ice. If the Illians got it from the island, got it in the same way that Trenton did, or through other means is unclear.