The wizarding world allows slavery?

Since that’s how it was in the books, I’d say they touched upon it.

Some species are viewed as lesser than others, that’s part of the mythology. Not everything is gonna be sunshine and rainbows in good fantasy stories. You have dark mages, monsters, and yes, slaves.

It gets even worse in later books, because a.) these elves have been brainwashed into going along with the slavery and hurting themselves if they say anything bad about their masters, and b.) when Hermione comes up with a campaign to free all of them, nobody takes her seriously and think she's taken part in a lost cause. Nobody has any sympathy for these creatures because they are ugly, small, pathetic, and not very intelligent beyond causing trouble or doing what they've been ordered to do. Most wizards give them about as much regard as they do for garden gnomes that have to be tossed on a daily basis.