I am attempting to make my species of elves more alien to humans.
My plan is to change their physiology in a very specific way.
How realistic would it be for them to have retractable claws similar to a feline?
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As dmm said, fingers are pretty poor locations for normal claws, retractable or otherwise.
Your kitties have small, retractable claws on their fingers. These claws are the same size as fingernails, giving them room to retract into the elves fingers. This allows the elf to use his fingers the same way you or I do, with the addition of sharp scratchy fingernails when desired.
More importantly, your cats have much larger and more pronounced hind-limb claws. Toes are short and stubby, rarely used for fine manipulation, and are the perfect candidate for claws.
Having small fore-claws and large hind-claws would allow elves to do very elvish things. They would be much better adapted to climbing trees, much better suited to a life in the wilds. They could use them as styluses in their early writing systems. They could use them to dig into the earth as they bound through the wet and leaf-strewn forest floor.
To me, small fore-claws make a lot of sense and help with the suspension of disbelief, but if you don't like them, you could explain them away by claiming they had become vestigial and had eventually disappeared.
I can't think of any animals that have formidable (weapon-scale) claws that also have long, dexterous fingers like humans. Look at a cat's fingers and toes -- they are rather short. Cats would make lousy typists and pianists. Your elves would need very sturdy fingers, if their retractable claws are going to be useful as weapons. Otherwise, they'd sprain/break their fingers when clawing their enemies. However, you could claim the claws are vestigial -- still useful for slashing someone's face, or picking one's teeth, but not for serious battles. [People please correct if I'm wrong.]
A humanoid variant of an elf with cat claws. What an excellent idea. I would go the route that xmens wolverine takes and put the claws in between the fingers. Hidden in the webbing. That's the most logical way I can picture cat claws seamlessly integrated into a humanoid anything.