Which faction poses the greatest challenge for the Dwarves?

If it's a late game, then things don't look very good for the Orc. The Dwarf will have Inga (as a second hero), and with her, all the runes. And it's not a given that the Orc will guess with the Silencer (it might be Chaos Arcanum and a Trickster).

I've already tried playing as a Dwarf against an Orc. Orcs can have such magic immunity, and even take Ice Shield, which no Arcanum can help against. So, we definitely go for Sanctuary and take Anti-Chaos and Luck, then you won't be able to break through the Orc, whether with Light or Chaos. Besides, the Orc absorbs a lot of damage, and physical attacks are almost useless.