Fantasy’s race problems feel more early 20th century than anything. To give it credit, the genre has mostly moved on from Conan the Barbarian cutting a swath through hordes of swarthy foreigners, or even Tolkien’s untrustworthy Easterlings, and the problems are mostly reflections of larger societal problems. I honestly don’t think there’s conscious malice in most of the fantasy being written now. But 1) it’s hard to talk about and examine one’s views on race, always; 2) it’s hard to create cultures; 3) it’s easy to write characters you know; 4) one takes a lot of shortcuts to get a story on the page; 5) it’s hard to make race feel important in a fantasy world.
1) It’s obvious that the Conan example is bad. The enemies are faceless non-white people; they’re all evil, and they’re all evil becauseof their race. But it’s less immediately obvious why Paula Volsky’s The White Tribunal is uncomfortable. It’s set in a fantasy version of British-occupied India, and it has a lot of fantasy Indian characters, mostly treated sympathetically – but the reveal at the end is that the god the fantasy Indians have been worshipping is really a demon trying to claim the world for Chaos. “A god is really evil” is a fairly common fantasy trope, and in the abstract it’s not bad, but when you’re replicating the 19th century as exactly as she does, it’s also replicating Victorian missionaries’ talking points about redeeming benighted savages from the grip of the demons they worship. And I very much doubt that Volsky has anything against Indians or Hinduism in her personal life, but she also didn’t think about how that plot point would read.
2) There are a lot of eastern Asian inspired cultures in fantasy. They tend to be closed to foreigners, have an emperor who is often divine, and control their emotions well. And those are all fun traits to have – if it weren’t so uncomfortable to read the mostly white heroes traipsing around the court and imposing their cultural values on them, I’d like those cultures a lot. And it’s much easier to take 19th Orientalism and create Others than to create a culture that will read similarly and not feel so close to China or Japan that it can’t be ignored.
3) Heroes tend to be white because their writers tend to be white. It’s easier, again, to write a hero you know, and so you write a white party even if you have a diverse fantasy world, because you can draw from people and stereotypes you know. If you’re white, it’s much easier to flesh out a stereotype of a white person – say one of your supporting characters is the in-universe equivalent of a soccer mom who wants to see the manager. You can draw from soccer moms you know, or you can give her non-soccer-mom traits that still feel appropriate (she’s a really good alchemist; she’s read a lot of history; she can do minor surgery), and so make her feel more real. But the template non-white characters are harder to work with, and harder to work with for a white writer especially. I’m sure it’s possible for a writer to flesh out your stereotypical “urban” youth, but it’s hard to make the extra traits not feel racist as well – it’s the “articulate” problem. “Articulate” is a good trait, but if you say that a black person is “articulate,” especially with the surprise it’s often said with, it simply shows that you don’t think of most black people as able to voice their thoughts eloquently. So while the character could have come from the slums of the fantasy city and his strength could be that he spent a lot of time sneaking into the library to read, an author could attempt that, but make it too much of a contrast – it would be surprising for the other characters, but if it’s too underlined, it also reads as though it’s condescending.
4) Stories rely on signifiers, cultural contexts, intertexts, and the expectations of their readers. So if you want to evoke something – maybe that closed culture I mentioned in point 2 – you call it Tzhung-tzhungchai (a real example) and make the emperor self-controlled and self-interested. And it’s definitely a problem, but it’s hard to flesh out a minor character, especially, and it’s often not worth it. So you drop Tzhung-tzhungchai in there, and your readers will get it and create more to it than is there, and see what you want them to, and you move on.
5) People have pointed out that you could make Aragorn black and change nothing. And you definitely could! There’s no reason for a secondary world to duplicate the racial politics and problems of our world. In Discworld ‘white and brown get together and beat up green’ – in a secondary world, a modification of “there’s one race – the human race!” would actually make sense. You meet a strange people who live across the steppe from you and think “well, at least they’re human, not orcs!” So what does it mean to have a black hero in a secondary world? And that gets into “what does it mean to be Black,” which people who spend a lot of time thinking about race in our world don’t agree on, so fantasy authors don’t have a lot of hope. You could mention your hero’s dreadlocks, maybe, or their dark skin, and spend less time giving the beautiful people very stereotypically white features. And honestly, race not mattering does work for me, the way gender not being a bar to anything works for me in fantasy, but I know there are people who would look at a black Aragorn, even in a black Gondor, and wonder why their race didn’t matter to the people of Bree.
The upshot of all those points is that I think the problem is that using racist stereotypes, whether consciously or not, is easy, and that examining race is hard, and so is writing a book, and if you can take some shortcuts, you probably will, and that I don’t think current fantasy has problems with race beyond the ones the culture at large has.